In this article, I will show you how to create a simple plan that is easy to manage and provides protection to the company if financial goals are not met. Comprehensive guide on the format and template for an annual bonus announcement letter, informing employees about their bonuses.This employee bonus policy template is ready to be tailored to your company's needs and can be a starting point for setting up your employment policies. Explore executive bonus plan examples for effective performance-based incentives that drive success and align leadership goals. What is a Bonus Plan? A bonus plan is an agreement between the employer and employee to pay out a predetermined amount of money based on performance. This file contains details about the Executive Bonus Plan, including its purpose, definitions, and administrative sections. An incentive bonus agreement is a contract between an employer and employee that details information about a cash bonus offered as an incentive. Reward your employees for hardwork.