SERVICE AND DISTRIBUTION 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 C;
WHEREAS, the Company employs Pilgrim Securities, Inc. (the "Distributor")
as distributor of the securities of which it is the issuer; and
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 Distribution Plan and the
Shareholder Service Plan of the Fund with respect to Class C shares as set forth
hereinafter.
NOW, THEREFORE, the Company hereby adopts this Plan on behalf of the Fund
with respect to its Class C shares, in accordance with Rule 12b-l under the Act,
on the following terms and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class C shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily net assets of the Fund's Class
C 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.
B. In addition to the amount provided in 1.A. above, the Fund shall
pay to the Distributor, as the distributor of the Class C 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 C 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 NASD.
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2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Fund in
connection with any activities or expenses primarily intended to result in the
sale of the Class C shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations (collectively, the "Service Organizations") to obtain various
distribution related and/or administrative services for the Fund. These services
may include, among other things, processing new shareholder account
applications, preparing and transmitting to the Fund's Transfer Agent computer
processable tapes of all transactions by customers and serving as the primary
source of information to customers in providing information and answering
questions concerning the Fund and their transactions with the Fund. The
Distributor is also authorized to engage in advertising, the preparation and
distribution of sales literature and other promotional activities on behalf of
the Fund. In addition, this Plan hereby authorizes payment by the Fund of the
cost of printing and distributing Fund Prospectuses and Statements of Additional
Information to prospective investors and of implementing and operating the Plan.
Distribution expenses also include an allocation of overhead of the Distributor
and accruals for interest on the amount of distribution expenses that exceed
distribution fees and contingent deferred sales charges received by the
Distributor. Payments under the Plan are not tied exclusively to actual
distribution and service expenses, and the payments may exceed distribution and
service expenses actually incurred.
The amount set forth in paragraph 1.B. 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
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 C 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 Fund, 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 C shares of the Fund on not more than 30 days' written
notice to any other party to the Plan.
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7. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless such amendment is approved by a vote of the shareholders of the Class C
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 Directors 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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