1
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.
2
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.
- 2 -
3
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.
- 3 -
4
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:
------------------------------------
Title:
----------------------------------
Date:
-----------------------------------