SHAREHOLDER SERVICE PLAN
WHEREAS, Pilgrim Growth and Income Fund, Inc. (the "Company") engages in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company currently consist of one
series, Pilgrim Growth and Income Fund, Inc. (the "Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class Q;
WHEREAS, the Company employs Pilgrim Securities, Inc. (the "Distributor")
as distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into an Underwriting
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, the Company wishes to adopt the Shareholder Service Plan of the
Fund with respect to Class Q shares as set forth hereinafter.
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class Q shares, and the Distributor hereby agrees to the terms of
the Plan, in accordance with Rule 12b-l under the Act, on the following terms
and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the Class Q
shares of the Fund, a service fee at the rate of 0.25% on an annualized basis of
the average daily net assets of the Fund's Class Q shares, provided that, at any
time such payment is made, whether or not this Plan continues in effect, the
making thereof will not cause the limitation upon such payments established by
this Plan to be exceeded. Such fee shall be calculated and accrued daily and
paid monthly or at such intervals as the Board of Directors shall determine,
subject to any applicable restriction imposed by rules of the National
Association of Securities Dealers, Inc.
2. The amount set forth in paragraph 1 of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect until it, together with any related
agreements, has been approved by votes of a majority of both (a) the Company's
Board of Directors and (b) those Directors of the Company who are not
"interested persons" of the Company (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or any
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agreements related to it (the "Rule 12b-l Directors"), cast in person at a
meeting (or meetings) called for the purpose of voting on this Plan and such
related agreements.
4. After approval as set forth in paragraph 3, and any other approvals
required pursuant to the Act and Rule 12b-1 thereunder, this Plan shall take
effect at the time specified by the Company's Board of Directors. The Plan shall
continue in full force and effect as to the Class Q shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
5. The Distributor shall provide to the Directors of the Company, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
6. This Plan may be terminated as to the Fund at any time, without payment
of any penalty, by vote of the Directors of the Company, by vote of a majority
of the Rule 12b-l Directors, or by a vote of a majority of the outstanding
voting securities of Class Q shares of the Fund on not more than 30 days'
written notice to any other party to the Plan.
7. This Plan may not be amended to increase materially the amount of
service fee provided for in paragraph 1 hereof unless such amendment is approved
by a vote of the shareholders of the Class Q shares of the Fund, and no material
amendment to the Plan shall be made unless approved in the manner provided for
approval and annual renewal in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of Directors
who are not interested persons (as defined in the Act) of the Company shall be
committed to the discretion of the Directors who are not such interested
persons.
9. The Company shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a period of
not less than six years from the date of this Plan, any such agreement or any
such report, as the case may be, the first two years in an easily accessible
place.
Dated: July 26, 2000
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