options holder and rights issue

I believe the letter dated 25-10-11 to Options holders is confusing.

1. For the purposes of my attempted clarification, let's assume I have a hypothetical 4 million shares and 1 million options.

2. I 'am' an eligible shareholder and can participate in the Rights issue to buy say 1 million shares (i.e. up to 4 million) at 0.003.

3. To do this (as in 2) I surely DO NOT have to exercise any options first by the Record Date.

4. My take is that the last paragraph of the 25 October letter is confusing because it does not cover the obvious scenario of point 2 above - it must only be that I have to exercise my options (at 1.5c) if I want them to be counted in the share entitlement.

5. In more detail, obviously I should only have to exercise the options first (to covert them to shares) IF I WANTED TO BUY (4+1)=5 MILLION NEW (RIGHTS) SHARES AT THE 0.003.

6. Assuming I only seek limited shares as in Point 2 (or for that matter if I do nothing and do not participate in the Rights issue because I'm broke or something) then I expect my hypothetical 1 million options must be still in place, and exercisable at 1.5c in 2013 as per the previous arrangements.

Can you blokes fault my interpretation here?