Reorganisation Proposals

Henderson High Income Trust PLC
21 July 2000



RECOMMENDED CAPITAL REORGANISATION PROPOSALS

The Board of Henderson High Income Trust PLC (the
'Company') today announces recommended proposals for the
reorganisation of the Company's share capital which are
intended to result in an increase in the income payable
to Shareholders and a reduction in the discount to net
asset value at which the Ordinary Shares have been
trading.

KEY INFORMATION

The Proposals comprise:

- Substituting for every Ordinary Share currently held,
the issue, free of new consideration, of one Unit
comprising one New Ordinary Share in the Company and one
new Zero Dividend Preference Share in Henderson High
Income Securities plc, (which will be a wholly-owned
subsidiary of the Company)

- The option for Shareholders to hold their new
investment either in the form of Units or in the
underlying separate components

- The taking on of additional borrowings

- The alteration of the proportion of the Company's
annual management expenses and finance costs which is
charged to capital reserves

- The deferral of the obligation of the Directors to put
forward a resolution for the continuation of the life of
the Company from the current date of 2002 until the
Company's Annual General Meeting in 2005

The Company's investment objectives and policy will
remain substantially unchanged and the Company will
continue to be classified as a high income trust.

The Directors believe that the benefits of the Proposals
will be that:

- Existing Shareholders will in future hold an investment
comprising two distinct elements:  ZDP Shares offering a
relatively secure pre-determined capital return; and New
Ordinary Shares offering a substantially improved yield
and an increased gearing ratio
- There will be greater demand for the two classes of
shares than currently exists for the Ordinary Shares.  As
a consequence, the Directors believe that there should,
over time, be a resulting reduction in the aggregate
discount at which an investment in the Group trades in
relation to its NAV

- There should be scope in due course for lowering the
yield requirement on the Company's portfolio, allowing
the Manager additional flexibility to seek to improve
prospects for capital growth

The Proposals require the approval of Shareholders at an
Extraordinary General Meeting to be held on 16 August
2000.

Expected timetable:
                                        
EGM of the Company to approve Proposals 16 August 2000

Dealings in New Ordinary Shares, ZDP    17 August 2000
Shares and Units expected to commence

New Ordinary Shares, ZDP Shares and     17 August 2000
Units issued in uncertificated form
credited to CREST stock accounts

Certificates for New Ordinary Shares,   By 23 August 2000
ZDP Shares and Units issued in
certificated form to be despatched

Enquiries:

Henderson High Income Trust PLC          020 7410 4367
Sir Antony Beaumont-Dark                 0156 477 5640
Job Curtis                               020 7588 2800

Henderson Investors Limited
Norman Brown                             020 7410 3185
Stephen Westwood                         020 7477 5517

The Henderson Press Office
Vicki Staveacre                          020 7410 4222

Deutsche Bank
Simon Colson                             020 7545 8000

This announcement, for which the directors of Henderson
High Income Trust PLC are solely responsible, has been
approved by Deutsche Bank, which is regulated in the
United Kingdom by the Securities and Futures Authority
Limited, solely for the purposes of section 57 of the
Financial Services Act 1986.



HENDERSON HIGH INCOME TRUST PLC

RECOMMENDED CAPITAL REORGANISATION PROPOSALS

The Board of Henderson High Income Trust PLC has today
announced recommended proposals for a reorganisation of
the Company's share capital which are intended to result
in an increase in the income from shareholders'
investment and a reduction in the discount to net asset
value at which the Ordinary Shares trade.

The Proposals comprise:

- In substitution for every Ordinary Share held, the
issue, free of new consideration, of one Unit comprising
one New Ordinary Share in the Company and one new Zero
Dividend Preference Share ('ZDP Shares') in Henderson
High Income Securities plc ('Henderson Securities'),
which will be a wholly-owned subsidiary of the Company

- The opportunity for Shareholders to hold their new
investment either in the form of Units or in the
underlying separate components

- The taking on of additional borrowings

- The alteration of the proportion of the Company's
annual management expenses and finance costs which is
charged to capital reserves

- The deferral of the obligation of the Directors to put
forward a resolution for the continuation of the life of
the Company from the current date in 2002 until the
Company's Annual General Meeting in 2005.

The Proposals are conditional on approval by the
Company's Shareholders of the Resolution to be proposed
at the Extraordinary General Meeting of the Company to be
held on Wednesday 16 August 2000.

The Company's investment objectives and policy will
remain substantially unchanged and the Company will
continue to be classified as a high income trust.

Effects and Benefits of the Proposals

Following the implementation of the Proposals the
Company's issued share capital will comprise 52,603,865
New Ordinary Shares (the same as the number of Ordinary
Shares currently in issue), but Shareholders will also
have received, free of new consideration, the same number
of Zero Dividend Preference Shares in Henderson
Securities. These will have an initial capital
entitlement of 50p and will be separately listed.  As a
result, the net asset value per existing Ordinary Share
will be reduced by 50p, but the overall net asset value
of the assets attributable to each Shareholder will be
virtually unchanged, whilst the aggregate market value of
their investment should increase.   Shareholders will be
able to hold, and deal in, their revised investment
either in the form of Units each comprising one New
Ordinary Share and one ZDP Share, or in the underlying
separate components.

As at 14 July 2000 (the latest practicable date prior to
the publication of this announcement) the Company's gross
assets were £93.5 million. On the same basis, following
the Reorganisation, the gross assets of the Group would
have been £117.8 million and the New Ordinary Shares, the
ZDP Shares and the Bank Facility would respectively have
represented 57%, 22% and 21% of the initial gross assets
of the Group.

The following table illustrates the position of a
Shareholder in the Company holding 1000 Ordinary Shares
before and after the implementation of the Proposals.
The figures show the position on the basis that the
Reorganisation, had become effective on 14 July 2000. The
yields shown in the table are prospective yields and are
based on the Directors' forecast of dividends for the
twelve months ending 30 June 2001, although the Company's
financial year end will remain at 31 December.

                        BEFORE                           AFTER   
                       
               NAV  Market    Net     Net       NAV  Market    Net     Net
                     Value  Yield   Yield             Value  Yield   Yield
                               on      on                       on      on
                              NAV  Market                      NAV  Market
                                    Value                            Value
1000         £1777   £1560   4.1%    4.6%                                 
Ordinary
Shares
1000 Units                                    £1765   £1560   5.6%    6.3%
comprising:
   1000 ZDP                                    £500    £500     0%      0%
   Shares
   1000 New                                   £1265   £1060   7.8%    9.3%
   Ordinary
   Shares

Note: The 'After' position in the above table is on the
basis that the market value of a New Ordinary Share on 14
July 2000 would have been the same as that of an existing
Ordinary Share on that date, having deducted an assumed
market value for the ZDP Shares of 50p, their initial
capital entitlement.

As shown in the table above, the forecast yield on a
Unit, which will effectively be equivalent to an existing
Ordinary Share, will be higher than that on an existing
Ordinary Share.  The forecast yield on each New Ordinary
Share will be substantially higher.

The Directors believe that the benefits of the Proposals
will be that:

- Existing Shareholders will in future hold an investment
comprising two distinct elements: ZDP Shares, offering a
relatively secure pre-determined capital return; and New
Ordinary Shares, offering a substantially improved yield
and an increased gearing ratio.

- There will be greater demand for the two classes of
shares than currently exists for the Ordinary Shares.  As
a consequence, the Directors believe that there should,
over time, be a resulting reduction in the aggregate
discount at which Shareholders' investment in the Group
trades in relation to its NAV.  There can, however, be no
guarantee that such a reduction will occur nor that the
individual shares or the Units will trade at the values
illustrated in the table above.

- There should be scope in due course for lowering the
yield requirement on the Company's equity portfolio,
allowing the Manager additional flexibility to seek to
improve prospects for capital growth.

Reasons for and Background to the Proposals

The Directors have for some time been concerned at the
level at which the Company's Ordinary Shares have been
trading on the London Stock Exchange relative to the
underlying net assets attributable to them. The Directors
believe that the principal reason for this is that the
yield offered by the Ordinary Shares is at the low end of
the range of yields available on other UK investment
trusts in the high income category, which typically have
more highly geared structures.

The Directors, in conjunction with the Company's
financial adviser, Deutsche Bank, and the Manager, have
considered various ways in which this situation might be
remedied.   They have concluded that it would not be
possible to produce a worthwhile increase in the dividend
on the Ordinary Shares under the current capital
structure without compromising the quality and growth
prospects of the Company's equity portfolio.

The Directors have accordingly decided to put forward
these Proposals, which involve a reorganisation of the
Company's share capital and the introduction of gearing
in the form of the Bank Facility and the ZDP Shares.

Rights and Characteristics of ZDP Shares

Henderson Securities has been formed solely as a vehicle
through which the ZDP Shares will be issued.  Following
the reorganisation, the Company will control all the
voting shares in Henderson Securities.  Henderson
Securities will have a pre-determined life to 30
September 2005, the date on which the ZDP Shares are due
to be repaid, although its directors will have the power
to propose an extension of its life beyond that date
subject to the approval of the holders of the ZDP Shares.

The ZDP Shares, which will rank behind the Bank Facility
referred to below, are designed to provide a relatively
secure predetermined capital return over their life.
They will have an initial capital entitlement of 50p per
share, which will increase at a daily compound rate
equivalent to a compound annual rate of 8.2% so as to
reach a final capital entitlement of 74.87p per share on
30 September 2005.  On the basis of the Company's gross
assets as at 14 July 2000 this final capital entitlement
and the Bank Facility would be covered 1.83 times by the
combined initial gross assets of the Company and
Henderson Securities following implementation of the
Proposals.

The ZDP Shares will have no dividend rights and will not
generally carry voting rights, although the approval of
ZDP Shareholders will be required for any alteration to
their rights or any proposals likely to affect their
position, including material changes to the investment
policy of Henderson Securities. The capital entitlement
of ZDP Shareholders will be further protected by
covenants given by the Company to Henderson Securities.

The ZDP Shares will be separately listed and their price
will be quoted daily in the usual financial media,
including the Financial Times.  In addition they may be
held, together with New Ordinary Shares, in the form of
Units as referred to below, which will be separately
listed.

The allotment of the ZDP Shares to Ordinary Shareholders
will result in part of their holding in the Group being
represented by a security with a pre-determined growing
capital entitlement and a value which should be
unaffected by movements in equity markets, although it
may be affected by movements in interest rates.

Rights and Characteristics of New Ordinary Shares

The New Ordinary Shares are entitled to all the net
revenue from the Company's portfolio that is resolved to
be distributed and will be entitled to all of the net
assets of the Group following repayment of the ZDP
Shares.  New Ordinary Shareholders are entitled to vote
on all matters at all general meetings of the Company.

The New Ordinary Shares offer a substantially improved
forecast yield, compared with the existing Ordinary
Shares.  Additionally the introduction of the ZDP Shares
and the New Bank Facility, described below, will provide
an increased gearing ratio for the New Ordinary Shares.

The New Ordinary Shares will have an actual gearing ratio
of 1.3 times which equates to an effective exposure to
the equity market of 133 per cent.  This compares with
the current position for the Ordinary Shares of 0.82
times and 82 per cent. respectively.

Arrangements for Shareholders to hold their investment in
Units

Subject to the Proposals being approved by Shareholders,
arrangements have been made whereby investors may hold or
create Units, each comprising one New Ordinary Share in
the Company and one ZDP Share in Henderson Securities,
which may be dealt in on the London Stock Exchange.
Unless Shareholders instruct the Company (by filling in
their proxy form appropriately) that they wish to hold
their shares separately, all holdings of New Ordinary
Shares and ZDP Shares will be combined into Units
automatically.  The New Ordinary Shares, ZDP Shares and
Units will each be capable of being settled through the
CREST system.

The main difference between an existing and new
investment, for Shareholders who hold their investments
in the form of Units, will be that the Units should enjoy
a higher level of dividend income and will have a higher
gearing ratio than the existing Ordinary Shares as a
result of the introduction of the Bank Facility and the
ZDP Shares.  There will also be a marginal reduction in
net asset value as a consequence of the costs of the
Proposals.  Such Shareholders will otherwise be in much
the same position as regards their capital and income
entitlements as if they had continued to hold their
original Ordinary Shares.

Investment Objective and Policy

The Company will retain its existing objective of
investing in a prudently diversified selection of both
well-known and smaller companies so as to provide a high
income stream and prospects of capital growth and it
should continue to be classified as a high income trust.
Accordingly, your Directors are not proposing any major
change in the Company's existing investment policy
although there will be a modest increase in the overall
yield on the Company's fixed interest portfolio.

Your Directors believe that one result of the Proposals
will be to allow the Manager greater flexibility in
future to manage the income requirements of the Group
without sacrificing prospects for achieving capital
growth.

It is expected that the Company will continue to be
classified as a high income trust for the purposes of the
FTSE Actuaries indices and that its current status as a
constituent member of the FTSE All-Share Index should be
unaffected by the Proposals.   The Company will continue
to be managed in such a way as to qualify for approval as
an investment trust for the purposes of section 842 of
the Taxes Act.

Gearing

The Bank Facility, taken together with the gearing
provided by the ZDP Shares, will increase the potential
gearing ratio of the Ordinary Shares to 1.77 times.
However, because part of the Group's assets is and will
be in the form of fixed interest securities (excluding
for this purpose convertible securities), the actual
gearing of the New Ordinary Shares to movements in the
equity portion of the Group's portfolio following
completion of the Reorganisation will be 1.33 times as
compared with the current figure of 0.82 times.  The
effective gearing to movements in equity markets of
investors who hold their investment in the form of Units
will be 0.95 times compared with the gearing of 0.82
times for the existing Ordinary Shares as at 14 July
2000.

New Bank Facility

As part of the Proposals the Company has arranged a bank
facility of up to £25 million with The Royal Bank of
Scotland plc.  This loan will be for a term of five
years.

The Company will pay interest on the Bank Facility on a
floating rate basis (although this may be swapped to a
fixed rate if this were deemed to be beneficial for the
Company) at a margin of 65 basis points over The Royal
Bank of Scotland's costs of funds plus mandatory liquid
assets costs.  The initial interest rate would have been
6.95 per cent. if the Bank Facility had been entered into
on 20 July 2000 (the latest practicable date prior to
publication of this document).

The proceeds of the Bank Facility will be invested in
accordance with the Company's investment policy.  The
existing borrowings have been repaid as part of the
Group's new banking arrangements.

Deferral of Continuation Vote

In accordance with the Articles of Association of the
Company, an ordinary resolution to approve the
continuation of the life of the Company was passed at the
annual general meeting held in 1997.   A similar
resolution is due to be proposed at the annual general
meeting to be held in 2002.  Under the Proposals, this
resolution will be deferred to the annual general meeting
to be held in 2005.  Since the ZDP Shares are due to be
repaid on 30 September 2005, after the probable date of
this meeting, the Directors and Shareholders will be able
to determine the future of both the Company and Henderson
Securities in the light of market conditions prevailing
around the time of the annual general meeting of the
Company in 2005.

Future Dividends

The Company distributed dividends totally 7.1p (net) per
Ordinary Share in respect of the year ended 31 December
1999. The Company has already paid a first interim
dividend of 1.8p (net) in respect of the current
financial year ending on 31 December 2000 and the
Directors intend shortly to declare a second interim
dividend of the same amount in respect of the quarter
ended 30 June 2000, payable in October.

If the Proposals are implemented, and in the absence of
unforeseen circumstances, the Directors would expect to
be able to declare dividends on each New Ordinary Share
of not less than 9.9p (net) in respect of the twelve
months ending 30 June 2001.  If the Proposals are not
implemented the equivalent figure would be 7.2p assuming
an unchanged level of dividend.  There will, therefore,
be an increase of 37.5 per cent. in the level of
quarterly dividends as a result of the Proposals.
Thereafter, the Directors intend that, subject to
satisfactory dividend growth on the Company's equity
portfolio, the Company should increase its dividend
payments where possible, although not necessarily at the
same rate as in the past.  The Directors anticipate that
over the next few years part of the dividend may be paid
out of the Company's revenue reserves.

There will be no change in the timing of the dividend
payments as a result of the Proposals and the first
dividend payable at the new higher rate on the New
Ordinary Shares if the Proposals are implemented will be
the third interim dividend in respect of the financial
year ending on 31 December 2000, payable in January 2001.
The Company's financial year end will remain as 31
December in each year.

It should be noted that the prospective dividends
outlined above are not intended to be, nor should they be
taken, to represent profit forecasts.

Change in Accounting Policy

The Directors also intend to increase the proportion of
the Company's management expenses and finance costs which
will be charged to the Company's capital reserve.   At
present, 50% of the management fee payable to Henderson
Investors (less than part of the fee which is deemed to
be administration expenses and is charged to revenue) is
charged to capital reserve and 50% of finance costs are
charged to the capital reserve.   It is proposed that
following the implementation of the Proposals, 60% of the
management fee and 75% of all finance costs will be
charged to capital reserve.   The Directors consider that
this basis of allocation fairly represents the expected
long term apportionment of returns on the Company's
portfolio as between capital gains and income.

Each year an amount representing the accrued capital
entitlement of the ZDP Shares will be charged to the
Company's capital reserve.  The entire net assets of the
Group will be available to meet the final capital
entitlement of the ZDP Shares on 30 September 2005.

Issue of Further Shares

The Resolution to be proposed at the EGM includes a
provision to confer authority on the Board of the Company
to allot New Ordinary Shares on a non pre-emptive basis
up to an aggregate nominal amount equal to 10% of the
issued share capital of the Company immediately after
implementation of the Proposals.  The Resolution further
provides that any such allotment may not be made at a
price below the then prevailing net asset value.

The Board of Henderson Securities may allot further ZDP
Shares without limit, although subject always to the
cover for the ZDP Shares not falling below 1.5 times, as
calculated in accordance with the articles of association
of Henderson Securities.  This cover test is intended to
safeguard the position of existing ZDP Shareholders at
the point where any shares are proposed to be issued
which rank in priority to or pari passu with such ZDP
Shares.  The issue of further ZDP Shares does not need to
be made on a pre-emptive basis.

Share Repurchases

The Directors were given authority at the Company's last
Annual General Meeting to make market purchases of up to
14.99% of the Company's issued Ordinary Shares.   Similar
authority is to be taken at the EGM in relation to the
New Ordinary Shares and the Directors intend to maintain
the present policy of repurchasing New Ordinary Shares
when it is deemed to be in the best interests of the
Company and of Shareholders, subject to the cover for the
ZDP Shares not falling below 1.5 times.

Henderson Securities will also have authority to
repurchase up to 14.99% of the ZDP Shares to be issued
under the Proposals with such repurchases to be carried
out only when it is deemed to be in the best interests of
Henderson Securities and the ZDP Shareholders to do so.

The Directors will only sanction the repurchase of shares
of either the Company or Henderson Securities when such
shares can be purchased at a price representing a
discount to the then prevailing net asset value of the
shares in question or when the effect of the purchase of
such shares, taken together with any related purchase of
the other class of shares, will result in an increase in
the NAV of the New Ordinary Shares.  When considering
making repurchases of either class of shares the
Directors will also have regard to the effect of such
purchases on the Company's revenue account.

Articles of Association

The Resolution to be proposed at the EGM also seeks
approval for the adoption of the New Articles of
Association.  Since the Company's Articles of Association
were updated at the last Annual General Meeting in April
2000 the New Articles of Association are substantially
unchanged.

Taxation

In summary, the Directors have been advised that the
Proposals should be tax neutral for Shareholders and the
Company, and in particular:

- the Proposals will not give rise to a disposal by a
Shareholder for the purposes of United Kingdom taxation
of chargeable gains;
- the issue and eventual repayment of ZDP Shares by
Henderson Securities will not be treated as a
distribution for the purposes of the Taxes Act;
- the Proposals will not prejudice the Company's ability
to satisfy the requirements for approval as an investment
trust; and
- to the extent that a Shareholder holds his existing
Ordinary Shares in a PEP or ISA the New Ordinary Shares
and the ZDP Shares (whether held separately or in the
form of Units) received on the implementation of the
Proposals may continue to be held in a PEP or ISA.

The Board advises Shareholders who are in any doubt as to
their taxation position, or who are subject to tax in a
jurisdiction other than the United Kingdom, to consult
their professional adviser without delay.

Extraordinary General Meeting

At the Extraordinary General Meeting a special resolution
will be proposed, inter alia, to sanction the Proposals
and adopt the New Articles of Association.  The special
resolution will require approval by a majority of at
least 75 per cent. of the votes cast at the meeting.

Dealings and Certificates

If the Proposals are approved, Ordinary Shareholders on
the register at the close of business on 15 August 2000
will receive one ZDP Share and one New Ordinary Share in
exchange for each Ordinary Share held on that date and
these will be, unless the Shareholder indicates
otherwise, be constituted in a Unit.

Recommendation

Your Directors, who have been advised by Deutsche Bank,
consider the Proposals to be in the best interests of the
Company and of the Shareholders as a whole.    They
unanimously recommend Shareholders to vote in favour of
the Resolution to be proposed at the Extraordinary
General Meeting, as they intend to do in respect of their
own beneficial holdings, which amount, in aggregate, to
121,326 Ordinary Shares, representing 0.23% of the total
issued Ordinary Share capital of the Company.

Definitions

The following definitions apply throughout this
announcement unless the context otherwise requires:

'Act'                      the Companies Act 1985, as amended
'Admission'                admission to the official list of
                           the UK Listing Authority and
                           admission to trading on the London
                           Stock Exchange of the ZDP Shares
                           becoming effective by the decision
                           of UKLA to admit such shares to
                           listing being announced in
                           accordance with paragraph 7.1 of
                           the Listing Rules and by the
                           announcement of the decision of the
                           London Stock Exchange to admit such
                           shares to trading being announced
                           in accordance with the LSE
                           Admission Standards
'Articles of Association'  the existing articles of
                           association of the Company
'B Shares'                 interim special fixed rate
                           preference shares, initially of 10p
                           each, but following consolidation,
                           of 50p each in the capital of the
                           Company, arising pursuant to (and
                           to be cancelled in accordance with
                           the terms of) the Proposals
'Bank Facility'            the agreement dated 21 July 2000
                           between the Company and The Royal
                           Bank of Scotland plc to provide a
                           multi-currency revolving advance
                           facility of £25,000,000
'Board'                    the Directors of the Company
'Business Day'             a day (except a Saturday or Sunday)
                           on which clearing banks are open
                           for business in London
'Capital Gains Tax'        UK capital gains tax or, in respect
                           of corporations, corporation tax on
                           chargeable gains
'certificated' or 'in      not in uncertificated form (that
certificated form'         is, not in CREST)
'Continuation Resolution'  the ordinary resolution proposed to
                           be put to Ordinary Shareholders in
                           April 2005 to approve the
                           continuation of the Company at that
                           time
'Cover'                    the number of times by which the
                           initial gross assets of the Group
                           exceed the aggregate of the final
                           repayment entitlement of the ZDP
                           Shares and the principal amount of
                           the Bank Facility
'CREST'                    a paperless settlement system (as
                           defined in the Regulations)
                           enabling securities to be evidenced
                           otherwise than by certificates and
                           transferred otherwise than by
                           written instrument, and operated by
                           CRESTCo Limited
'Deferred Shares'          interim deferred shares of 50p each
                           in the capital of the Company
                           arising as a result of the
                           reclassification of the B Shares
                           pursuant to the Proposals
'Deutsche Bank'            Deutsche Bank AG London
'Directors'                the Directors of Henderson and/or
                           of Henderson Securities, as the
                           context requires
'Effective Date'           the date on which the Proposals
                           become effective, being the date of
                           Admission, which is expected to be
                           17 August 2000
'Extraordinary General     the extraordinary general meeting
Meeting' or 'EGM'          of the Company convened for
                           Wednesday 16 August 2000 at which
                           the Resolution required to effect
                           the Proposals will be proposed
'gross assets'             the gross assets of the Group from
                           time to time which, for the
                           avoidance of doubt, shall include
                           any amount capable of being drawn
                           down under the Bank Facility
                           (whether or not actually drawn
                           down)
'Group'                    the Company and Henderson
                           Securities
'Henderson' or 'Company'   Henderson High Income Trust PLC
'Henderson Securities'     Henderson High Income Securities
                           plc
'Henderson Securities      the directors of Henderson
Directors'                 Securities
'Implementation Agreement' the agreement dated 20 July 2000
                           between the Company, Henderson
                           Securities and Henderson Investors
'IMRO'                     Investment Management Regulatory
                           Organisation Limited
'initial gross assets'     the gross assets of the Group
                           (including the proceeds of the Bank
                           Facility) immediately following the
                           implementation of the Proposals
                           after deducting the Group's current
                           liabilities
'ISA'                      Individual Savings Account
'Issue'                    the issue of ZDP Shares pursuant to
                           the Reorganisation as described in
                           this document
'Listing Rules'            the listing rules of the UK Listing
                           Authority
'Loan Note'                the loan note in the sum of
                           £26,301,932.50 to be issued by the
                           Company to Henderson Securities
                           pursuant to the terms of the
                           Implementation Agreement
'London Stock Exchange'    London Stock Exchange plc
'LSE Admission Standards'  the rules issued by the London
                           Stock Exchange in relation to the
                           admission to trading on the London
                           Stock Exchange of, and continuing
                           requirements for, securities
                           admitted to the Official List
'Manager' or 'Henderson    Henderson Investors Limited
Investors'
'net asset value' or 'NAV' in respect of an Ordinary Share, a
                           ZDP Share or a Unit, the amount
                           which would be payable to a holder
                           of that share on any given date if
                           the Company were wound up and its
                           assets (after making provision for
                           all its liabilities (including for
                           this purpose the capital
                           entitlement of the ZDP shares) and
                           excluding current period revenue
                           items) distributed on that date
                           (valuing assets and providing for
                           liabilities in accordance with the
                           normal accounting policies of the
                           Company)
'New Articles of           the new articles of association
Association'               proposed to be adopted in
                           connection with the Proposals
'New Ordinary Shares'      ordinary shares of 5p each in the
                           capital of the Company arising as a
                           result of the Reorganisation
'Official List'            the list maintained by the UKLA
                           pursuant to Part IV of the
                           Financial Services Act 1986
'Ordinary Shareholders' or holders of Ordinary Shares
'Henderson Shareholders'
'Ordinary Shares'          existing ordinary shares of 25p
                           each in the capital of the Company
                           or New Ordinary Shares, as the
                           context requires
'PEP'                      Personal Equity Plan
'potential gearing ratio'  the ratio of the gross assets of
                           the Company at any relevant time to
                           the aggregate net asset value of
                           the Ordinary Shares at that time
'Proposals' or             the proposed capital reorganisation
'Reorganisation'           of the Company and issue of ZDP
                           Shares by Henderson Securities
'Regulations'              the Uncertificated Securities
                           Regulations 1995 (SI 1995 No.
                           95/3272)
'Resolution'               the special resolution to be
                           proposed at the EGM to approve the
                           Proposals
'Shareholders'             holders of Ordinary Shares, New
                           Ordinary Shares and/or ZDP Shares,
                           as the context requires
'Special Redeemable        a special redeemable preference
Preference Share'          share of £1 in the capital of the
                           Company
'Taxes Act'                Income and Corporation Taxes Act
                           1988, as amended
'TCGA'                     Taxation of Chargeable Gains Act
                           1992, as amended.
'UK Listing Authority' or  the Financial Services Authority,
'UKLA'                     as the competent authority for
                           listing in the United Kingdom
'uncertificated' or 'in    Recorded in the register as being
uncertificated form'       held in uncertificated form in
                           CREST and title to which, by virtue
                           of the Regulations, may be
                           transferred by means of CREST
'Unit'                     a unit comprising one New Ordinary
                           Share and one ZDP Share
'ZDP Repayment Date'       30 September 2005
'Zero Dividend Preference  holders of Zero Dividend Preference
Shareholders' or 'ZDP      Shares
Shareholders'
'Zero Dividend Preference  zero dividend preference shares of
Shares' or 'ZDP Shares'    50p each in the capital of
                           Henderson Securities