ESOP fully known as “Employee stock option plan” is one of the best mechanisms to reward employees and to attract the talent, this enables employees to participate in the financial success and long-term growth of the company. Indian Start-ups have been adopting the ESOP faster and rewarding their employees, however there are multiple challenges with respect to compliance being faced by the company while implementing the ESOP policy. There are multiple complex definitions which includes exercise period, vesting period, exercise price, strike price and each one of this carries their own importance hence one should be very careful while implementing the ESOP policy in the organisation. Let us see the definitions of the below mentioned terms. Vesting: means the process by which the Option Holder is given the right to Exercise the Options granted to him in pursuance of this Plan. Vesting Period : means the period from the date of Grant of Options till the period of option mentioned in th