Thoughts on IMUOD?, page-19

In answer to your questions, here is my understanding but happy to be corrected by others:

1) Do you get the chance to convert them to heads and receive the special dividend or do you miss out?
Dividends normally will not apply to option holders. Only fully paid shares.
You can exercise your options at any time prior to the expiry date. Note yesterdays example.
Depends on the timing of a dividend announcement and the amount of time before the ex-dividend date.

2) Once you convert ur options to heads, does your 1 year of CGT begin from the date of conversation.
Yes. The clock starts again from the day the fully paid shares are registered against your name.
Also, If you hold an option for 12 months and then sell (without exercising) the CGT discount applies. Provided you are not classified by the ATO as a trader.