This chapter provides tax-saving tips for employer stock options, employer stock in retirement accounts, and restricted stock. There are two types of employee stock options: incentive stock options (ISOs) and nonqualified stock options (NQSOs. When an employee exercises an NQSO, the profit is considered ordinary income subject to federal tax. Restricted stock awards are becoming more common than stock options for executive compensation. Restricted stock is stock that cannot be freely transferred and is at risk of forfeiture.