<PAGE>   1
                                                                  EXHIBIT 10.7.4


                               REXENE CORPORATION

                      LONG TERM  PERFORMANCE UNIT PROGRAM
                             FOR EXECUTIVE OFFICERS


         THIS  LONG TERM PERFORMANCE UNIT PROGRAM FOR EXECUTIVE OFFICERS has
been established by Rexene Corporation, a Delaware corporation (the
"Corporation"), to provide incentive compensation opportunities for certain
executives of the Corporation.

                                    RECITALS

         On March 13, 1997, the Committee and the Board approved an incentive
compensation strategy to provide for, among other things, the award of
Performance Units to certain executives and other key employees of the
Corporation for periods beginning on or after January 1, 1997.  This document
sets forth the full statement of the terms and conditions of the incentive
compensation strategy as it relates to the award of Performance Units to
Executive Officers of the Corporation and as contemplated and intended by the
Committee and the Board on March 13, 1997.

         NOW, THEREFORE, the Corporation hereby sets forth the Rexene
Corporation  Long Term Performance Unit Program for Executive Officers (the
"Executive Program") as follows:

                                   ARTICLE I

                                  DEFINITIONS

1.1      The capitalized terms as used in this Executive Program have the
         meanings set forth in Exhibit A, which is attached hereto and
         incorporated herein by reference for all purposes.

                                   ARTICLE II

                         ELIGIBILITY AND PARTICIPATION

2.1      Participation.  Subject to the provisions of this Article II, only
         those Executive Officers who are designated by the Committee as
         "Participants" in this Executive Program for any Performance Period
         shall participate in this Executive Program for that Performance
         Period.  In the event that a Participant ceases to be an Executive
         Officer during a Performance Period, his or her participation in the
         Executive Program shall cease at such time.
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2.2      Award Eligibility.  Except as provided in Section 2.4, a Participant
         must be an employee of the Corporation being paid on the regular
         payroll (including approved annual vacation leave) of the Corporation
         as of the last day of a Performance Period to be eligible to receive a
         Performance Unit Award pursuant to the Executive Program for that
         Performance Period.

2.3      Leaves During Performance Period.  Any provision of the Executive
         Program to the contrary notwithstanding:  (i) for purposes of
         determining whether a Participant is on the regular payroll as of the
         last day of a Performance Period under this Article, a Participant on
         a leave of absence as of the last day of the Performance Period
         (whether paid or unpaid) to which the employee is entitled pursuant to
         the Family and Medical Leave Act shall be deemed to be on the regular
         payroll as of that date; and (ii) for purposes of determining whether
         a Participant is on the regular payroll as of the last day of a
         Performance Period under this Article, a Participant receiving
         benefits pursuant to the disability plans or policies of the
         Corporation applicable to the Participant shall be deemed to be on the
         regular payroll as of that date.

2.4      Termination During Performance Period.

         (a)     Any Participant whose employment with the Corporation
                 terminates during a Performance Period (but prior to the last
                 day of such Performance Period) for any reason other than a
                 Vested Termination shall not be eligible to receive a
                 Performance Unit Award for the Performance Period.

         (b)     Any Participant whose employment with the Corporation
                 terminates during a Performance Period (but prior to the last
                 day of the Performance Period) and such termination qualifies
                 as a Vested Termination, such Participant shall be eligible to
                 receive a pro rata proportion of the Performance Unit Award to
                 which he/she would otherwise become entitled, but only with
                 respect to the Performance Period which ends in the same
                 fiscal year in which the Vested Termination occurs, and the
                 former Participant who is no longer employed by the
                 Corporation shall forfeit all rights to Performance Unit
                 Awards as to all other Performance Periods.  The pro rata
                 proportion shall be measured by a fraction, the numerator of
                 which is the portion of the Performance Period during which
                 the Participant's employment continued and the denominator is
                 the Performance Period.

         (c)     If a Participant ceases to be a Participant during a
                 Performance Period, but continues thereafter to be an employee
                 of the Corporation or its Subsidiaries, then such person shall
                 be entitled to a Performance Unit Award only for the
                 Performance Period that ends in the same fiscal year in which
                 his/her participation ceased, calculated in the same manner as
                 for a Participant who has a Vested Termination, and such
                 person shall forfeit all rights to Performance Unit Awards as
                 to all other Performance Periods.



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         (d)     In the event of a Participant's death during a Performance
                 Period, his or her Award, if any, shall be paid to his or her
                 designated beneficiary under the Rexene Corporation Savings
                 Plan, or if no such beneficiary designation has been made by
                 the Participant or if the Rexene Corporation Savings Plan is
                 no longer in effect at the time such award is paid, to his or
                 her estate.

         (e)     In the event of a termination of participation in the
                 Executive Program, the Awards to which a former Participant
                 becomes entitled under section 2.4(b) or (c) above, shall be
                 payable at the same time and in the same manner as provided in
                 section 5.2 below.

2.5      New Participants.  In the event that an Executive Officer is
         designated by the Committee to become a Participant after the
         commencement of a Performance Period, such new Participant shall be
         entitled to receive a pro rata Award with respect to each Performance
         Period that is in existence on the date on which such Executive
         Officer becomes a Participant.  The pro rata proportion of the Award
         shall be measured by a fraction, the numerator of which is the portion
         of the Performance Period during which the Executive Officer is a
         Participant and the denominator is the Performance Period.

                                  ARTICLE III

                             PERFORMANCE OBJECTIVES

3.1      1997 3-Year Performance Period.  The Performance Objectives for the
         3-Year Performance Period commencing January 1,  1997, under this
         Executive Program shall be as set forth on Exhibit  B, which is
         attached hereto and incorporated herein by reference for all purposes.

3.2      For 3-Year Performance Periods commencing on or after January 1, 1998,
         within the first 90 days of each such Performance Period, the
         Committee shall in writing (i) approve the Performance Objectives set
         forth on Exhibit B, (ii) modify the Performance Objectives set forth
         on Exhibit B, or (iii) establish new Performance Objectives which
         shall provide the basis for calculating Performance Unit Awards for
         Participants for such Performance Period.  In the event that the
         Committee does not approve or modify the Performance Objectives set
         forth on Exhibit B or establish new Performance Objectives within the
         first 90 days of a 3-Year Performance Period, then the Performance
         Objectives in effect for the immediately preceding 3-Year Performance
         Period shall be in effect for such 3-Year Performance Period.  Any new
         Performance Objectives established by the Committee for a Performance
         Period may be based on stock price, cash flows, net income, operating





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         income, expense levels, debt balance, debt ratings, total shareholder
         return, return on investment, return on equity, return on capital,
         weighted average cost of capital, economic value added, earnings per
         share, net asset value per share, or such other objectives as the
         Committee may determine appropriate for a Performance Period.  The
         Performance Objectives may be based on the performance of the
         Corporation generally, in the absolute or in relation to its peers, or
         the performance of a particular employee, division, department,
         branch, subsidiary or other unit to which a particular employee is
         assigned.  In establishing the Performance Objectives for the
         applicable Performance Period, the Committee shall determine the
         required levels of performance for each Performance Objective.

                                   ARTICLE IV

                               PERFORMANCE UNITS

4.1      Calculation of Number of Targeted Performance Units.  For  each
         Performance  Period, the number of Targeted Units for each Participant
         shall be determined as follows:

<TABLE>
<CAPTION>
       Position                              Targeted Units
       --------                              --------------
<S>                               <C>
Chief Executive Officer:          Target Award Percentage times Base Salary
                                  -----------------------------------------
                                               Average Base Price

Business Unit Heads:              Target Award Percentage times Base Salary
                                  -----------------------------------------
                                               Average Base Price

Other Executive Officers:         Target Award Percentage times Base Salary
                                  -----------------------------------------
                                               Average Base Price
</TABLE>

4.2      Certification of Performance Achievement.  Promptly after the end of
         each Performance Period and prior to payment of an Award for such
         Performance Period in accordance with section 5.2, the Committee shall
         certify in writing (i) the results of the Corporation for the
         Performance Period as to each measure of performance set out in the
         Performance Objectives for such Performance Period; and (ii) the
         Actual Percentage Award by applying the factors set out in the
         Performance Objectives for such Performance Period.  For  each 3-Year
         Performance Period commencing on or after January 1, 1997, performance
         results and Actual Performance Awards will be determined by reference
         to the  Performance  Objectives for such Performance Period.





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<PAGE>   5
4.3      Calculation of Performance Units Awarded.  The actual number of
         Performance Units that are ultimately awarded to a Participant shall
         be determined at the end of each Performance Period by using the
         following formula:

            Performance Units Awarded = Targeted Units X Actual Percentage Award

         provided, however, that the maximum number of Performance Units
         awarded to any Participant shall not exceed (i) with respect to the
         Chief Executive Officer and each Business Unit Head who is a
         Participant, two hundred percent (200%) of the number of each such
         Participant's Targeted Units, and (ii) with respect to each other
         Participant, one hundred seventy percent (170%) of each such
         Participant's Targeted Units.

                                   ARTICLE V

                           FORM AND TIMING OF AWARDS

5.1      Form of Award.  The amount payable to a Participant with respect to a
         Performance Period shall be equal to the number of the Participant's
         Performance Units Awarded at the end of a Performance Period
         (determined under Section 4.3) multiplied by the Ending Value for the
         Performance Period. For  any Performance Period,  Awards may be paid
         in cash or shares of Common Stock of the Corporation, or in any
         combination thereof, at the discretion of the Committee, provided that
         no more than 50 percent of an Award may be paid in shares of Common
         Stock of the Corporation, and provided further that no Awards shall be
         paid in shares of Common Stock of the Corporation in excess of the
         shares of Common Stock that remain available for award and issuance
         under the Long Term Incentive Plan, or such other plan or plans that
         may hereafter be established.  If the Committee determines to pay a
         portion of a Performance Unit Award in shares of Common Stock of the
         Corporation, the number of shares of Common Stock paid to the
         Participant shall be equal the amount of the award payable in shares
         of Common Stock as described above divided by the Ending Value of
         Common Stock for the applicable Performance Period.  Any provision of
         this Executive Program to the contrary notwithstanding, the maximum
         Award based upon attainment of Performance Objectives that may be
         payable to any Participant for a Performance Period calculated as
         described above shall be one million dollars.

5.2      Timing of Award.  Awards under the Executive Program shall be paid by
         the last day of the second month following the completion of a
         Performance Period.  Notwithstanding the foregoing, with respect to a
         Performance Period that ends as a result of a Change of Control,
         Awards for that Performance Period shall be paid as soon as
         practicable, but no later than 30 days following the Change of
         Control.





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5.3      Shortened Performance Period.  In the event that a Performance Period
         ends prior to the end of a fiscal year as a result of a Change of
         Control or any other reason, the amount of the awards made under the
         Executive Program shall be calculated using the following adjustments
         to determine Return on Capital:

         (a)     for any accounting period that is less than a full fiscal year
                 of 12 months, the Net Operating Profit for the shortened
                 accounting period shall be calculated by annualizing on a pro
                 forma basis Net Operating Profit for the period ending as of
                 the last day of the calendar month immediately preceding the
                 Change of Control or other termination of the Performance
                 Period.

         (b)     the Ending Invested Capital for each relevant Performance
                 Period shall be the amount of the Invested Capital as of the
                 day immediately preceding the Change of Control or other
                 termination of the Performance Period.

5.4      Taxes.  The Corporation shall have the right in connection with awards
         under this Executive Program to (i) require Participants or their
         beneficiaries or legal representatives to remit to the Corporation an
         amount sufficient to satisfy all federal, state and local withholding
         tax requirements and (ii) deduct from all payments under the Executive
         Program amounts sufficient to satisfy such withholding tax
         requirements.  Whenever payments under the Executive Program are to be
         made to a Participant in cash, such payments shall be net of any
         amounts sufficient to satisfy all federal, state and local withholding
         tax requirements.

                                   ARTICLE VI

                                 ADMINISTRATION

6.1      Administration.  The Executive Program shall be administered by the
         Corporation's Compensation Committee of the Board unless the
         Compensation Committee fails to meet the qualifications of Section
         162(m) of the Code, in which event the Committee appointed from time
         to time by the Board shall be (i) comprised solely of two or more
         members of the Board who are "outside directors" for purposes of
         Section 162(m) of the Code and (ii) constituted so as to permit the
         Executive Program to comply with Rule 16b-3 under the Exchange Act.

6.2      Powers of Committee.  The Committee shall have the right and
         authority, in its sole and absolute discretion, (a) to adopt, amend,
         or rescind administrative and interpretive rules and regulations
         relating to the Executive Program; (b) to construe the Executive
         Program; (c) to make all other determinations necessary or advisable
         for administering the Executive Program; and (d) to exercise the
         powers conferred on the Committee under the Executive Program.  The
         Committee may correct any defect, supply any omission or reconcile any





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<PAGE>   7
         inconsistency in the Executive Program in the manner and to the extent
         it shall deem expedient to carry it into effect, and it shall be the
         sole and final judge of such expediency.  The determinations of the
         Committee on the matters referred to in this Section 6.2 shall be
         final and conclusive.

6.3      Amendment or Termination.  The Committee shall have the exclusive
         authority to amend or modify the Executive Program and the Board shall
         have the exclusive authority to suspend or terminate the Executive
         Program at any time, provided that no amendment, modification,
         suspension or termination shall in any manner adversely affect the
         right of any Participant to receive any amount to which such
         Participant has become entitled prior to such amendment, modification,
         suspension or termination or would become entitled in the absence of
         such amendment, modification, suspension or termination.

                                  ARTICLE VII

                                 MISCELLANEOUS

7.1      Source of Payment.  Awards payable under the Executive Program in the
         form of Common Stock are made pursuant to and are subject to the
         Long-Term Incentive Plan.  Awards payable in cash shall be paid from
         the general assets of the Corporation.  To the extent that a
         Participant or designated beneficiary acquires a right to receive a
         payment, in cash or Common Stock from the Corporation pursuant to this
         Executive Program, such right shall be no greater than the right of
         any unsecured general creditor of the Corporation.

7.2      No Right to Employment.  Nothing in the Executive Program shall confer
         upon any Participant any right to continue in the employ of the
         Corporation or to be entitled to any remuneration or benefits not set
         forth in the Executive Program or interfere with or limit the right of
         the Corporation to modify the terms of or terminate such Participant's
         employment at any time.

7.3      Severability.  In the event that any provision of the Executive
         Program shall be held illegal or invalid for any reason, such
         illegality or invalidity shall not affect the remaining parts of the
         Executive Program, and the Executive Program shall be construed and
         enforced as if the illegal or invalid provision had not been included.


7.4      Stockholder Approval.  To the extent that any payments under this
         Executive Program which would otherwise be payable to any Covered
         Employee when added to such Covered Employee's other Remuneration
         would result in such Covered Employee's total Remuneration for such
         taxable year being in excess of one million dollars, then such excess
         shall not be paid to such Covered Employee unless prior to the date of
         payment this





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         Executive Program shall have been approved by a vote of the holders of
         a majority of shares of Common Stock of the Corporation present in
         person or represented by proxy at a duly convened meeting of
         stockholders.  In the event that a Covered Employee has total
         Remuneration in excess of one million dollars for a taxable year
         disregarding any payments made under this Executive Program, then no
         amounts shall be paid to such Covered Employee under this Executive
         Program unless this Executive Program is approved by the holders of a
         majority of the shares of Common Stock of the Corporation present in
         person or represented by proxy at a duly convened meeting of the
         stockholders of the Corporation.

7.5      Transferability.  A Participant shall not have the right to
         anticipate, alienate, sell, transfer, assign, pledge, or encumber his
         or her right to receive any Performance Unit Award made under the
         Executive Program.

7.6      No Restriction of Corporate Action.  The adoption of the Executive
         Program or any modification or amendment hereof does not imply any
         commitment to continue or adopt the same program, or any modification
         hereof, or any other program for incentive compensation for any
         succeeding Performance Period.

7.7      Effective Date.  The Executive Program shall be effective as of
         January 1,  1997, and shall continue indefinitely until such time as
         it is terminated pursuant to section 6.3.

7.8      Governing Law.  To the extent not preempted by federal law, the
         Executive Program, and all agreements hereunder, shall be construed in
         accordance with and governed by the laws of the State of Texas.

         IN WITNESS WHEREOF, the Corporation has caused this Executive Program
to be executed effective as of January 1, 1997.

                               REXENE CORPORATION



                               By:
                                  ----------------------------
                               
                               Title:
                                     ------------------------- 





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                                   EXHIBIT A


                               REXENE CORPORATION

                       LONG TERM PERFORMANCE UNIT PROGRAM
                             FOR EXECUTIVE OFFICERS

                                  DEFINITIONS

         "Actual Percentage Award" is a number, expressed as a percentage of
the Targeted Units, which is set out in Exhibit B under the columns titled "%
of Units Awarded."

         "Average Base Price" of Common Stock means the average of the Closing
Prices of Common Stock of the company under consideration for the last 45
trading days immediately preceding a Performance Period.

         "Average Closing Price" of Common Stock means the average of the
Closing Prices of Common Stock of the company under consideration for the last
45 trading days of a Performance Period.

         "Award" means the cash and/or shares of Common Stock of the
Corporation awarded to a Participant under Article V.

         "Base Salary" means:

         (a)     with respect to the Chief Executive Officer, the annual base
                 salary of the Chief Executive Officer;

         (b)     with respect to the Business Unit Heads, the average of their
                 base salaries; and

         (c)     with respect to the Other Executive Officers, the average of
                 their base salaries,

all as reflected in the personnel records of the Corporation and in effect as
of the first day of a Performance Period, except that if an Executive Officer
becomes a Participant after the beginning of a Performance Period that
Participant's Base Salary shall mean his/her annual base salary on the date on
which such person becomes a Participant.

         "Board" means the Board of Directors of the Corporation.

         "Business Unit Head" means an Executive Officer who has line
management responsibilities for a principal operating unit or division of the
Corporation.





<PAGE>   10
         "Cause" means (i) conduct involving moral turpitude or fraud,
regardless of the context, which conduct shall be conclusively presumed if an
Executive Officer is convicted of or enters a plea of nolo contendere or
similar plea as to a crime involving moral turpitude or fraud, (ii) repeated
intoxication by alcohol or drugs during the performance of an Executive
Officer's duties, (iii) malfeasance in the conduct of an Executive Officer's
duties, including misuse or diversion of the Corporation's or a Subsidiary's
funds, embezzlement or willful and material misrepresentations or concealments
on any reports submitted to the Corporation or a Subsidiary, (iv) repeated
material failure by an Executive Officer to perform his or her duties as an
officer, or (v) material failure to follow or comply with the reasonable and
lawful directives of Continuing Directors or the written policies of the
Corporation.

         "Change of Control" means any one of the following: (i) any person or
group of persons (as defined in Rule 13d- 5 under the Exchange Act), together
with its affiliates, becomes the beneficial owner, directly or indirectly, of
more than 50% of the Corporation's then outstanding common stock, or more than
50% of the voting power of the Corporation's then outstanding securities
entitled generally to vote for the election of directors of the Corporation;
(ii) the occurrence of or the approval by the Corporation's stockholders of the
merger or consolidation of the Corporation with any other corporation, the sale
of any substantial portion of the assets of the Corporation or the liquidation
or dissolution of the Corporation unless, in the case of a merger or
consolidation, the Continuing Directors in office immediately prior to such
merger or consolidation will constitute for a substantial period of time after
such merger or consolidation at least two-thirds of the directors constituting
the board of directors of the surviving corporation of such merger or
consolidation and any parent (as defined in Rule 12b-2 under the Exchange Act)
of such corporation; or (iii) at least a majority of the Continuing Directors
in office immediately prior to any other action taken or proposed to be taken
by the Corporation's stockholders or by the Board determines that such action
constitutes, or that such proposed action, if taken, would effectively result
in a change of control of the Corporation and such action is taken.


         "Change of Control Value" means the amount determined in clause (i),
(ii) or (iii), whichever is applicable, as follows:  (i) the per share price of
Common Stock offered to stockholders of the Corporation in any merger,
consolidation, sale of assets or dissolution transaction; (ii) the price per
share of Common Stock offered to stockholders of the Corporation in any tender
offer or exchange offer whereby a Change of Control takes place; or (iii) if a
Change of Control occurs other than as described in clause (i) or clause (ii),
the fair market value per share of Common Stock of the Corporation determined
by the Committee as of the date of the Change of Control or such other relevant
date as may be determined by the Committee.  If the consideration offered to
stockholders of the Corporation in any transaction resulting in a Change of
Control consists of anything other than cash, the Committee shall determine the
fair cash equivalent of the portion of the consideration offered which is other
than cash.

         "Closing Price" of Common Stock on any day shall be determined as
follows: (i) if the Common Stock is listed on a national securities exchange or
quoted through the NASDAQ





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National Market System, the Closing Price on any day shall be the average of
the high and low reported Consolidated Trading sales prices of the Common Stock
for such day, or if no such sale is made on such day, the average of the
closing bid and asked prices of the Common Stock reported on the Consolidated
Trading listing for such day; (ii) if the Common Stock is quoted on the NASDAQ
inter-dealer quotation system, the Closing Price on any day shall be the
average of the representative bid and asked prices of the Common Stock at the
close of business for such day; or (iii) if the Common Stock is not listed on a
national securities exchange or quoted on the NASDAQ National Market System or
inter- dealer quotation system, the Closing Price on any day shall be the
average of the high bid and low asked prices of the Common Stock reported by
the National Quotation Bureau, Inc. for such day.  If the Common Stock is not
publicly traded at the time a determination of its value is required to be made
under the Executive Program, the determination of the Closing Price of the
Common Stock shall be made by the CPA in such manner as it deems appropriate.

         "Code" means Internal Revenue Code of 1986, as amended from time to
time.

         "Committee" means the Committee as appointed from time to time by the
Board to administer the Executive Program pursuant to section 6.1.

         "Common Stock" means (i) in the case of the Corporation, the common
stock, par value $.01 per share, of the Corporation or any stock or other
securities of the Corporation hereafter issued or issuable in substitution or
exchange for Common Stock; or (ii) the common stock, or the equivalent thereof,
of all other companies in the Peer Group.

         "Compensation Committee" means the Management Development and
Compensation Committee of the Board, or any successor thereto.

         "Constructive Termination" occurs if a Participant voluntarily resigns
his/her employment within three (3) years after either (i) any person or group
of persons (as defined in Rule 13d-5 under the Securities Exchange Act of
1934), together with its affiliates, becomes the beneficial owner, directly or
indirectly, of 20% or more of the Corporation's then outstanding Common Stock
or 20% or more of the voting power of the Corporation's then outstanding
securities entitled generally to vote for the election of directors of the
Corporation and thereafter directly or indirectly takes steps to influence the
management of the Corporation, or (ii) a Change of Control because as a
condition to continued employment with the Corporation, a Participant is
required to (1) relocate outside the greater Dallas area, (2) accept a
reduction in his/her base salary, or (3) accept a position of lesser
responsibility or authority than he/she had prior to such acquisition of the
Corporation's Common Stock.

         "Continuing Director" means any person who either (i) is a director of
the Corporation on January 1, 1997, or (ii) was designated as a Continuing
Director by a majority of the Continuing Directors.





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<PAGE>   12
         "Corporation" means Rexene Corporation, a Delaware corporation, or any
successor thereto.

         "Covered Employee" has the same meaning as given such term in Section
162(m)(3) of the Code.

         "CPA" means the firm of independent certified public accountants for
the Corporation at the time of the relevant determination or calculation.

         "Disability" means a termination of employment with the Corporation
because of a disability, within the meaning of the disability plans or policies
of the Corporation applicable to a Participant, as determined by the Committee
in its sole discretion.

         "Ending Invested Capital" means, except as provided in Section 5.3,
the sum of long-term debt and equity of the Corporation as of the last day of a
Performance Period, as reflected in the financial statements of the Corporation
prepared in accordance with GAAP.

         "Ending Value" means the average of the Closing Prices of the Common
Stock of the Corporation for the last 45 trading days of a Performance Period,
other than a Performance Period that ends on the date of a Change of Control.
For purposes of determining Ending Value for a Performance Period that ends as
a result of a Change of Control, Ending Value shall be equal to Change of
Control Value.   Except as provided in the immediately succeeding sentence, the
Ending Value shall  not exceed 200% of the Initial Value.  Notwithstanding the
foregoing, if a Performance Period ends as a result of a Change of Control,
there shall be no cap on Ending Value for such Performance Period.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Executive Officer" means an employee of the Corporation who is an
"officer" of the Corporation as defined in Rule 16a-1(f) promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act.

         "Executive Program" means this Rexene Corporation  Long Term
Performance Unit Program for Executive Officers, as amended from time to time.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which principles shall be applied on a consistent basis throughout
a Performance Period or other period under consideration, except that with
respect to less than wholly owned Subsidiaries and affiliated companies, the
amount of Net Operating Profit and the





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<PAGE>   13
amount of Invested Capital to be included in making the calculations under this
Executive Program shall include only the proportionate amount of the Net
Operating Profit and Invested Capital that equals the percentage ownership by
the Corporation of such Subsidiaries and affiliates.

         "Income Tax" means federal and state taxes determined or measured with
respect to the Operating Income of the Corporation for a Performance Period or
other period under consideration as reflected in the financial statements of
the Corporation prepared in accordance with GAAP for such period.

         "Initial Invested Capital" means the sum of long-term debt and equity
of the Corporation, as reflected in the financial statements of the Corporation
prepared in accordance with GAAP, as of the first day of a Performance Period
of the Corporation.

         "Initial Value" means the average of the Closing Prices of Common
Stock of the Corporation for the 45 trading days immediately preceding the
first day of a Performance Period.

         "Invested Capital" means the sum of long term debt and equity of the
Corporation, as reflected in the financial statements of the Corporation
prepared in accordance with GAAP.

         "Long-Term Incentive Plan" means the Rexene Corporation 1994 Long-Term
Incentive Plan.

         "Net Operating Profit" for a Performance Period or other period under
consideration means Operating Income less Income Tax.

         "Operating Income" means Operating Income for a Performance Period or
other period under consideration as reflected in the financial statements of
the Corporation prepared in accordance with GAAP, but where applicable adjusted
in accordance with Section 5.3(a).

         "Other Executive Officers" includes all Executive Officers other than
the Chief Executive Officer and the Business Unit Heads.

         "Participant" means any Executive Officer who is selected to
participate in the Executive Program as set forth in Article II hereof.

         "Peer Group" means those companies (other than the Corporation) set
forth on the attached Exhibit  C, as amended from time to time as provided in
Exhibit C.

         "Peer Group Total Shareholder Return" means the average of the Total
Shareholder Returns for the Peer Group.





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<PAGE>   14
         "Performance Objectives" mean the performance goals established for
each Performance Period in accordance with Article III pursuant to which
performance is measured.

         "Performance Period" means each of the  3-Year Performance Periods
commencing on or after January 1, 1997.

         "Performance Units" mean the number of Performance Units awarded as
determined under section 4.3.

         "Performance Unit Awards" or any variation thereof means an award of
Performance Units determined in accordance with Article IV.

         "Relative Total Shareholder Return" for a Performance Period means the
Total Shareholder Return of the Corporation divided by the Peer Group Total
Shareholder Return for the same period.

         "Remuneration" means "applicable employee remuneration" as defined in
Section 162(m)(4) of the Code.

         "Retirement" means a termination of employment with the Corporation
either (i) on a voluntary basis by a Participant who is at least 60 years of
age or (ii) otherwise with the written consent of the Committee in its sole
discretion.

         "Return on Capital" or "ROC" means Net Operating Profit for a
Performance Period or other period under consideration divided by Total
Invested Capital for the same Performance Period or other period under
consideration.

         "Subsidiary" means any present or future company (whether a
corporation, partnership, joint venture or other form of entity) in which the
Corporation owns, directly or indirectly, more than 50% of the equity.

         "Targeted Units" means the number of Performance Units initially
assigned to each Participant at the beginning of each Performance Period, as
set out in section 4.1 of the Executive Program.

         "Target Award Percentage" means a percentage applicable to each
Participant's position within the Corporation during a Performance Period, as
set forth on Exhibit D, which is attached hereto and incorporated herein by
reference for all purposes.  In the event that a Participant holds more than
one position within the Corporation during a Performance Period, his or her
Target Award Percentage for each position shall be determined by multiplying
the number of months in the Performance Period during which he or she holds
such position by the target award percentage set forth on Exhibit D for such
position, and then dividing the total by the number of months in





                                       6
<PAGE>   15
the Performance Period.  The results obtained by such calculations shall then
be combined to provide a weighted average Target Award Percentage.

         "3-Year Performance Period" means any period commencing on January 1
of any year after 1996 and ending on the first to occur of (i) the day prior to
the third anniversary thereof, (ii) the date on which a Change of Control
occurs, or (iii) the date of any suspension or termination of this Executive
Program.

         "3-Year Return on Capital" means the Return on Capital of the
Corporation during a Performance Period.  If the 3-Year Performance Period
shall for any reason be shorter than a full three fiscal years, then the Return
on Capital for such shorter Performance Period shall be calculated applying the
Initial Invested Capital and Ending Invested Capital as contemplated under
Section 5.3.

         "Total Invested Capital" for a Performance Period means the average of
Initial Invested Capital and Ending Invested Capital for a Performance Period.
In the event that the actual Ending Invested Capital for any  Performance
Period differs by more than five percent (5%) from the budgeted Ending
Investment Capital for such Performance Period, as set out in the capital
expenditure budget for each fiscal year during a Performance Period, and
during such Performance Period the Board increased, added to, accelerated,
decreased, eliminated or postponed the capital expenditures during such
Performance Period, the variation in capital expenditures resulting from such
Board action shall be excluded in determining the Ending Invested Capital for
such Performance Period.

         "Total Shareholder Return" or "TSR" means the ratio of Average Closing
Price of Common Stock of a company for a Performance Period plus cash dividends
paid on such Common Stock during the Performance Period to the Average Base
Price of Common Stock of such company for the Performance Period.

         "Vested Termination" means a Participant's termination of employment
with the Corporation (i) by reason of death, Disability, Retirement, or
Constructive Termination, or (ii) Without Cause.

         "Weighted Average Cost of Capital" or "WACC" means, when making the
calculations under Section 4.3 with respect to any Performance Period, the
after-tax interest rate on the Corporation's long term debt plus the cost of
the Corporation's equity, by applying the Capital Asset Pricing Model (see
e.g., Managerial Finance, Weston & Brigham, 7th Edition, pp. 107-110) ("CAPM").
If in the judgment of the Corporation's  CPA, the Capital Asset Pricing Model
becomes an inappropriate measure for determining WACC because of substantial
changes in the capital structure of the Corporation, then there shall be
substituted for the CAPM a different model selected by the CPA.

         "Without Cause" means any involuntary termination of employment with
the Corporation for any reason other than for Cause.





                                       7
<PAGE>   16
                                   EXHIBIT B


                               REXENE CORPORATION

                       LONG TERM PERFORMANCE UNIT PROGRAM
                             FOR EXECUTIVE OFFICERS



                             PERFORMANCE OBJECTIVES
                                      FOR
                           3-YEAR PERFORMANCE PERIODS

<TABLE>
<CAPTION>

                                      ==========================================
Where Return on                                   % of Units Awarded*
Capital is:                           ==========================================
 <S>                                   <C>         <C>         <C>        <C>
   4% or more                           50%        100%        150%       200%
   above WACC                                                      
                                      ------------------------------------------

   1% above WACC                        25%         50%        100%       150%
                                      ------------------------------------------

   Equal to WACC                        15%         35%         75%       100%
                                      ------------------------------------------
   Not more than 1%                                                
   below the WACC                        0%         25%         25%        50%
                                      ==========================================
</TABLE>
                                     TSR less   TSR greater        
                                     than 12%   than or equal        
                                                to 12%
 
                                        less than 1.00         1.00       1.10
                                            
                                            Relative Total Shareholder Return

*        Award levels for performance occurring between levels shown above will
         be determined through straight-line interpolation.




<PAGE>   17
                                   EXHIBIT  C

                               REXENE CORPORATION

                       LONG TERM PERFORMANCE UNIT PROGRAM
                             FOR EXECUTIVE OFFICERS




                                   PEER GROUP


<TABLE>
      <S>                                   <C>
      ARCO Chemical                         Georgia Gulf Corporation
      Borden Chemical and Plastic           Lyondell Petrochemical
      Dow Chemical                          NL Industries
      Eastman Chemical                      Union Carbide Corporation
      Geon Company
</TABLE>

In the event that a member of the above Peer Group ceases to be publicly traded
or substantially changes the nature of its business during a Performance Period
as determined by the Corporation's investment bankers at such time, then such
investment bankers shall select another company (i) that is in the polyolefin
and/or film business; (ii) whose stock is publicly traded, and (iii) that is
regarded by the investment bankers of the Corporation at such time as a
comparable company in the industry for stockholder evaluation purposes, to
replace such company as a Peer Group member.
<PAGE>   18
                                   EXHIBIT  D

                               REXENE CORPORATION


                       LONG TERM PERFORMANCE UNIT PROGRAM
                             FOR EXECUTIVE OFFICERS



                      TARGET AND MAXIMUM AWARD PERCENTAGES

<TABLE>
<CAPTION>
================================================================================
       Position                   Target Award %           Maximum Award %
--------------------------------------------------------------------------------
<S>                                  <C>                       <C>
         CEO                         30%                       60%
--------------------------------------------------------------------------------
  Business Unit Heads                25%                       50%
--------------------------------------------------------------------------------
Other Executive Officers             20%                       35%
================================================================================
</TABLE>