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                                                                    EXHIBIT 10.4

                                ROCK-TENN COMPANY

                        KEY EMPLOYEE INCENTIVE BONUS PLAN

               (As Amended by the Board of Directors on 10/27/94)

1.       Purposes. The purposes of this Key Employee Incentive Bonus Plan are to
         provide an incentive for selected key employees of Rock-Tenn Company
         (the "Company") and any Subsidiary of the Company, who are in a
         position to make a significant contribution to the successful
         operations of the Company or any Subsidiary of the Company; to attract
         and retain in the employ of the Company persons of outstanding ability;
         and to further the identity of interests of such employees with those
         of the shareholders of the Company generally.

2.       Definitions. For purposes of the Plan, the following terms shall have
         the following meanings:

         a.       "Administrative Committee" means a committee appointed by the
                  Board of Directors consisting of designated executive officers
                  to administer the Plan as set forth in Section 3.

         b.       "Base Salary" means the basic annual rate of compensation paid
                  by the Company or any Subsidiary to a Participant as of the
                  30th day of September of a Plan Year, determined without
                  regard to this Plan or any other incentive compensation,
                  profit sharing or pension Plan, directors, fees, medical or
                  health insurance or reimbursement Plans or other similar forms
                  of compensation.

         c.       "Bonus Level" means a percentage of Base Salary associated
                  with a Targeted Income Amount. The Bonus Level for any
                  Targeted Income Amount for any Plan Year shall be as
                  determined from time to time by the Board of Directors or the
                  Compensation Committee.

         d.       "Company" means Rock-Tenn Company, a Georgia corporation.

         e.       "Compensation Committee" means the Compensation Committee of
                  the Board of Directors as constituted from time to time.

         f.       "Eligible Employee" means an employee of the Company or any
                  Subsidiary who is in a position to make a significant
                  contribution to the operations of the Company of any
                  Subsidiary.

         g.       "Participant" means an Eligible Employee who has been selected
                  by the Board of Directors of the Company or the Administrative
                  Committee to receive a bonus award under the Plan.

         h.       "Plan" means this Key Employee Incentive Bonus Plan.

         i.       "Plan Year" means a fiscal year of the Company.

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         j.       "Management Committee" means those individuals designated from
                  time to time by the Board of Directors of the Company.

         k.       "Results of Operations Report" means the final report prepared
                  by the Chief Financial Officer of the Company with respect to
                  the results of operations of the Company and its Subsidiaries
                  for each Plan Year.

         l.       "Subsidiary" means with respect to any Plan Year any
                  corporation the income from which is required to be included
                  in the consolidated federal income tax return of the Company
                  for such Plan Year.

         m.       "Targeted Income Amounts" relating to designated Bonus Levels
                  shall be as determined from time to time by the Board of
                  Directors or the Compensation Committee. Bonus awards for any
                  Plan Year will be computed based on the amount of consolidated
                  pre-tax income of the Company and its subsidiaries as set
                  forth in the Results of Operations Report for such Plan Year,
                  which will be measured against the Targeted Income Amounts to
                  determine the applicable Bonus Level.

3.       Administration. The Plan shall be administered by the Board of
         Directors of the Company or by a committee consisting of certain
         executive officers appointed by the Board of Directors (the
         "Administrative Committee"). The Board of Directors of the Company
         shall have the authority to administer all matters pertaining to the
         operation of the Plan, and the Administrative Committee shall have all
         such powers of the Board with respect to the Plan except those provided
         in Section 6 hereunder or otherwise reserved herein to the Board of
         Directors or the Compensation Committee.

4.       Participants. Not later than 30 days after the end of each Plan Year,
         the Board of Directors of the Company or the Administrative Committee
         shall designate the Eligible Employees who shall be Participants for
         such Plan Year. Each Participant for such Plan Year shall be entitled
         to receive a bonus award determined in accordance with Section 5 hereof
         only if such Participant was an Eligible Employee for each day of such
         Plan Year; provided, however, that the Board of Directors of the
         Company or the Administrative Committee shall have the authority to
         include Eligible Employees as Participants whose employment begins
         during a Plan Year or ends during a Plan Year or whose employment
         during such year is interrupted so long as the Participant is an
         employee of the Company or a Subsidiary at the end of the Plan Year,
         but in such case the bonus award to which such Participant shall be
         entitled in accordance with Section 5 hereof shall be prorated on the
         basis of the number of days during such year that the Participant was
         an Eligible Employee.

5.       Bonus Awards.

         a.       Subject to Section 6, during each Plan Year, each Participant
                  shall be entitled to receive a bonus award computed and based
                  on the applicable Targeted Income Amount and related Bonus
                  Levels as approved by the Board of Directors or the
                  Compensation Committee for such Plan Year.


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b.                Bonus awards for any Plan Year shall be computed by the Chief
                  Financial Officer of the Company as soon as practicable
                  following the end of the Plan Year and thereafter will be
                  reviewed by the Board of Directors or the Compensation
                  Committee. Bonus awards shall be paid to Participants not
                  later than 60 days after the determination of the bonus awards
                  for such year; provided, however, that the Board of Directors
                  or the Administrative Committee in its discretion shall have
                  the authority to delay payment thereof for an additional 90
                  days.

6.       Amendment and Termination. Although it is the present intention of the
         Company to grant bonus awards hereunder annually, the Board of
         Directors reserves the right to amend the Plan from time to time or to
         repeal the Plan entirely, or to suspend the granting of awards
         temporarily or permanently; provided, however, that such right to amend
         or repeal the Plan or suspend or discontinue granting awards under the
         Plan may be delegated by the Board to the Compensation Committee.


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                             AMENDMENT NUMBER ONE TO
                                ROCK-TENN COMPANY
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         Pursuant to the Powers reserved in ss.8 of the Rock-Tenn Company
Supplemental Executive Retirement Plan which became effective as of October 1,
1994, Rock-Tenn Company hereby amends ss.2.5 and 2.7 of The Plan to read as
follows:

                  2.5      Rock-Tenn. The term "Rock-Tenn" shall mean Rock-Tenn
          Company, any successor to Rock-Tenn Company and any entity directly or
          indirectly controlled by Rock-Tenn Company or its successors.

                  2.7      Pension Plan. The term "Pension Plan" shall mean The
         Rock-Tenn Company Pension Plan, as amended from time to time and, if
         applicable, the RTS Packaging, LLC Pension Plan, as amended from time
         to time.

                  This Amendment Number One shall be effective as of this 23rd
day of September, 1998.

                                       ROCK-TENN COMPANY

                                       By:
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                                       Title:
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                                       Date:
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