Which of the following is a CORRECT statement about stock options?

a$)$

ISOs will receive preferential capital gains treatment if the disposition is considered qualified.

b$)$

Nonqualified stock options are subject to payroll taxes and income taxes upon exercise, whether the stock is sold, or not.

c$)$

Favorable long$-$term capital gain treatment for ISOs will be lost if the stock is sold within two years of the exercise date.

d$)$

The exercise price of an ISO must be at least $85\%$ of the fair market value of the stock at the time the ISO is granted.