Davis + Henderson Income Fund announces adoption of unitholder rights plan

TORONTO, May 4 /CNW/ - Davis + Henderson Income Fund (TSX: DHF.UN) ("Davis + Henderson" or the "Fund") today announced that its board of trustees has approved the adoption of a unitholder rights plan (the "Rights Plan"), effective May 4, 2010. The Rights Plan has received the conditional approval of the TSX. Although effective as of today, the Rights Plan is subject to ratification by Davis + Henderson unitholders within six months. Such approval will be sought at the Fund's annual and special meeting (the "Meeting") to be held on June 17, 2010. If the unitholders do not ratify the Rights Plan at the Meeting, the Rights Plan and all of the outstanding rights outstanding at the time will terminate.

The primary objectives of the Rights Plan are to ensure that, in the context of a bid for control of the Fund through an acquisition of units of the Fund, all unitholders have an equal opportunity to participate in the bid and are given adequate time to assess the bid. The Rights Plan is not intended to prevent take-over bids that treat unitholders fairly and offer fair value, and permits bids that meet certain requirements intended to protect the interests of all unitholders.

Davis + Henderson is not aware of any specific take-over bid for the Fund that has been made or is contemplated. The Rights Plan is similar to plans adopted by other Canadian companies.

Under the terms of the Rights Plan, one right (a "Right") will be issued by the Fund in respect of each outstanding unit. The Rights issued under the Rights Plan become exercisable only if a person acquires 20% or more of the units of the Fund without complying with the "permitted bid" provisions of the Rights Plan or without the approval of the Fund's board. In this event, Rights holders (other than the offeror, its affiliates, associates and joint actors) can purchase units of the Fund at a substantial discount to the prevailing market price at the time that the Rights become exercisable.

"Permitted bids" under the Rights Plan must be made to all holders of the Fund's units and must be open for acceptance for a minimum of 60 days. If at the end of 60 days at least 50% of the outstanding units (other than those owned by the offeror, its affiliates, associates and joint actors) have been tendered and not withdrawn, the offeror may take up and pay for the units but must extend the bid for a further 10 days to allow other unitholders to tender to the bid.

If the Rights Plan is approved by the unitholders at the Meeting, as part of the Fund's previously announced plan of arrangement to convert from an income trust to a corporate structure, the Rights Plan will terminate and all Rights issued thereunder will be cancelled and a shareholder rights plan of the resulting corporation, Davis + Henderson Corporation, will become effective. The terms and objectives of the Davis + Henderson Shareholder Rights Plan are substantially the same as those of the Rights Plan.

A copy of the Rights Plan is available on SEDAR at www.sedar.com.

ABOUT DAVIS + HENDERSON

Davis + Henderson is a leading solutions provider to the financial services marketplace. Founded in 1875, the company today provides innovative programs, technology products and technology based business services to customers who offer chequing accounts, credit card accounts and personal, commercial, and other lending and leasing products. Davis + Henderson Income Fund is listed on the Toronto Stock Exchange under the symbol DHF.UN. Further information can be found in the disclosure documents filed by Davis + Henderson Income Fund with the securities regulatory authorities, available at www.sedar.com.

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For further information: Brian Kyle, Executive Vice President and Chief Financial Officer, Davis + Henderson, Limited Partnership, [phone], Website: www.dhltd.com