You're correct about the reset occurring, yes.
What is the best for you depends on your circumstances and no one else can determine that, but here are the factors I can see that would influence the decision.
I don't see how you'd be better off selling the options and buying the shares, unless you don't expect to be holding the shares for at least 12 months from conversion. In that case, you may be better off selling the options now. This depends on the tax saving you having being greater than the share price growth, though, so it isn't a guarantee. If the shares shoot the lights out, you may be better off just having converted. It depends on your individual circumstances, ie buy price of the options and marginal tax rate, and how long you will be holding.
If you think you'll be holding for more than 12 months, the only advantage is that you'll be bringing forward the liability to this tax year. So if you're expecting to be in a higher tax bracket in future, it might be beneficial to sell the options now and pay the tax now, rather than in the future. This assumes you can afford to buy the same number of KDR shares while also paying a tax bill.
Aren't the options trading at a discount, as well? So you'd be giving away that much value if you wanted to buy the same amount of KDR shares after selling the options.
To my mind, making a decision like this purely for tax reasons is letting the tail wag the dog. I would just convert the options, hold for another 12 months and then forget about the idea. I definitely wouldn't want to be in a situation where I shortchanged myself by reducing my exposure to KDR to pay the tax bill I'd brought forward, which would be the worst of all worlds.
Pretty difficult to give specific advice for individual circumstances in a general manner, so have a think about the above and figure out how it fits for you.
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