MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3
FOR
PILGRIM GLOBAL INCOME FUND
WHEREAS, Pilgrim Global Income Fund (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"); and
WHEREAS, shares of common stock of the Company currently consist of one
series, Pilgrim Global Income Fund (the "Trust"); and
WHEREAS, the Company has adopted, on behalf of the Trust, a Multiple
Class Plan pursuant to Rule 18f-3 under the Act (the "Plan") with respect to the
Trust; and
WHEREAS, pursuant to an Underwriting Agreement dated July 26, 2000, the
Company on behalf of the Trust employs Pilgrim Securities, Inc. ("Distributor")
as distributor of the securities of which it is the issuer; and
NOW, THEREFORE, the Company hereby adopts, on behalf of the Trust, the
Plan, in accordance with Rule 18f-3 under the Act on the following terms and
conditions:
1. FEATURES OF THE CLASSES. The Trust issues its shares of common stock
in four classes: "Class A Shares," "Class B Shares," "Class C Shares," and
"Class Q Shares". Shares of each class of the Trust shall represent an equal pro
rata interest in the Trust and, generally, shall have identical voting,
dividend, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class of shares shall bear
any Class Expenses, as defined in Section 5 below; and (c) each class shall have
exclusive voting rights on any matter submitted to shareholders that relates
solely to it or its distribution arrangement and each class shall have separate
voting rights on any matter submitted to shareholders in which the interests of
one class differ from the interests of any other class. In addition, Class A,
Class B, Class C, and Class Q shares shall have the features described in
Sections 2, 5 and 6 below.
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2. SALES CHARGE STRUCTURE.
(a) CLASS A SHARES. Class A shares of the Trust shall be offered at the
then-current net asset value plus a front-end sales charge. The front-end sales
charge shall be in such amount as is disclosed in a Fund's current prospectus or
prospectus supplement and shall be subject to reductions for larger purchases
and such waivers or reductions as are determined or approved by the Board of
Trustees. There is no initial front-end sales charge on purchases of an amount
as disclosed in the prospectus. Class A shares generally shall not be subject to
a contingent deferred sales charge provided, however, that such a charge may be
imposed when shares are redeemed within one or two years of purchase and/or in
such other cases as is disclosed in the Trust's current prospectus or supplement
thereto subject to the supervision of the Board of Trustees.
(b) CLASS B SHARES. Class B shares of the Trust shall be offered at the
then-current net asset value without the imposition of a front-end sales charge.
A contingent deferred sales charge in such amount as is described in the Trust's
current prospectus or prospectus supplement shall be imposed on Class B shares,
subject to such waivers or reductions as are described in the Trust's prospectus
or supplement thereto, subject to the supervision of the Trust's Board of
Trustees.
(c) CLASS C SHARES. Class C shares of the Trust shall be offered at the
then-current net asset value without the imposition of a front-end sales charge.
A contingent deferred sales charge in such amount as is described in the Trust's
current prospectus or prospectus supplement shall be imposed on Class C shares,
subject to such waivers or reductions as are described in the Trust's prospectus
or supplement thereto, subject to the supervision of the Trust's Board of
Trustees.
(d) CLASS Q SHARES. Class Q shares of the Trust shall be offered at the
then-current net asset value without the imposition of a front-end sales charge.
Class Q shares shall not be subject to a contingent deferred sales charge.
3. SERVICE AND DISTRIBUTION PLANS. Each class of shares of the Trust
has adopted a Rule 12b-1 plan each with the following terms:
(a) CLASS A SHARES. Class A shares of the Trust may pay Distributor
monthly a fee at an annual rate of 0.25% of the average daily net assets of the
Trust's Class A shares for distribution or service activities (each as defined
in paragraph (f), below), as designated by Distributor. Distributor, on behalf
of Class A shares of the Trust, may pay Authorized Dealers quarterly a fee at
the annual rate of 0.25% of the average daily net assets of the Trust's Class A
shares for shareholder services and distribution activities (as defined in
paragraph (f), below) rendered to Class A Shareholders.
(b) CLASS B SHARES. Class B shares of the Trust may pay Distributor
monthly a fee at the annual rate of 1.00% of the average daily net assets of the
Trust's Class B shares for distribution or service activities (as defined in
paragraph (f), below), as designated by Distributor. Distributor, on behalf of
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Class B shares of the Trust, may pay Authorized Dealers quarterly a fee at the
annual rate of 0.25% of the average daily net assets of the Trust's Class B
shares for distribution and service activities (as defined in paragraph (f),
below) rendered to Class B shareholders.
(c) CLASS C SHARES. Class C shares of the Trust may pay Distributor
monthly a fee at the annual rate of 1.00% of the average daily net assets of the
Trust's Class C shares for distribution or service activities (as defined in
paragraph (f), below), as designated by Distributor. Distributor, on behalf of
Class C shares of the Trust, may pay Authorized Dealers quarterly a fee at the
annual rate of 0.25% of the average daily net assets of the Trust's Class C
shares for distribution and service activities (as defined in paragraph (f),
below) rendered to Class C shareholders.
(d) CLASS Q SHARES. Class Q shares of the Trust may pay Distributor
monthly a fee at the annual rate of 0.25% of the average daily net assets of the
Trust's Class Q shares for service activities (as defined in paragraph (f),
below) as designated by Distributor. Distributor, on behalf of Class Q shares,
may pay Authorized Dealers quarterly a fee at the annual rate of 0.25% of the
average daily net assets of the Trust's Class Q shares for service activities
(as defined in paragraph (f), below) rendered to Class Q shareholders.
(f) DISTRIBUTION AND SERVICE ACTIVITIES.
(1) As used herein, the term "distribution services" shall
include services rendered by Distributor as distributor of the shares of a Fund
in connection with any activities or expenses primarily intended to result in
the sale of shares of a Fund, including, but not limited to, compensation to
registered representatives or other employees of Distributor or to other
broker-dealers that have entered into an Authorized Dealer Agreement with
Distributor, compensation to and expenses of employees of Distributor who engage
in or support distribution of the Trusts' shares; telephone expenses; interest
expense; printing of prospectuses and reports for other than existing
shareholders; preparation, printing and distribution of sales literature and
advertising materials; and profit and overhead on the foregoing.
(2) As used herein, the term "service activities" shall mean
activities in connection with the provision of personal, continuing services to
investors in each Fund, excluding transfer agent and subtransfer agent services
for beneficial owners of shares of a Fund, aggregating and processing purchase
and redemption orders, providing beneficial owners with account statements,
processing dividend payments, providing subaccounting services for Fund shares
held beneficially, forwarding shareholder communications to beneficial owners
and receiving, tabulating and transmitting proxies executed by beneficial
owners; provided, however, that if the National Association of Securities
Dealers Inc. ("NASD") adopts a definition of "service fee" for purposes of
Section 2830 of the NASD Conduct Rules that differs from the definition of
"service activities" hereunder, or if the NASD adopts a related definition
intended to define the same concept, the definition of "service activities" in
this Paragraph shall be automatically amended, without further action of the
Board of Trustees, to conform to such NASD definition. Overhead and other
expenses of Distributor related to its "service activities," including telephone
and other communications expenses, may be included in the information regarding
amounts expended for such activities.
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4. COMPLIANCE STANDARDS. The Company desires that investors in the
Trust select the sales financing method that best suits his or her particular
financial situation. In this connection, Distributor may encourage Authorized
Dealers to establish standards which govern sales of shares of the Trust to
assist investors in making investment decisions and to help ensure proper
supervision of purchase recommendations.
5. ALLOCATION OF INCOME AND EXPENSES. (a) The gross income of the Trust
shall, generally, be allocated to each class on the basis of relative net
assets. To the extent practicable, certain expenses (other than Class Expenses
as defined below which shall be allocated more specifically) shall be subtracted
from the gross income on the basis of the net assets of each class of the Trust.
These expenses include:
(1) Expenses incurred by the Company (for example, fees of
Trustees, auditors and legal counsel) not attributable to the Trust or to a
particular class of shares of the Trust ("Corporate Level Expenses"); and
(2) Expenses incurred by the Trust not attributable to any
particular class of the Trust's shares (for example, advisory fees, custodial
fees, or other expenses relating to the management of the Trust's assets) ("Fund
Expenses").
(b) Expenses attributable to a particular class ("Class Expenses")
shall be limited to: (i) payments made pursuant to a 12b-1 plan; (ii) transfer
agent fees attributable to a specific class; (iii) printing and postage expenses
related to preparing and distributing materials such as shareholder reports,
prospectuses and proxies to current shareholders of a specific class; (iv) Blue
Sky registration fees incurred by a class; (v) SEC registration fees incurred by
a class; (vi) the expense of administrative personnel and services to support
the shareholders of a specific class; (vii) litigation or other legal expenses
relating solely to one class; and (viii) Trustees' fees incurred as a result of
issues relating to one class. Expenses in category (i) above must be allocated
to the class for which such expenses are incurred. All other "Class Expenses"
listed in categories (ii)-(viii) above may be allocated to a class but only if
the President and Chief Financial Officer have determined, subject to Board
approval or ratification, which of such categories of expenses will be treated
as Class Expenses, consistent with applicable legal principles under the Act and
the Internal Revenue Code of 1986, as amended.
Therefore, expenses of the Trust shall be apportioned to each class of
shares depending on the nature of the expense item. Corporate Level Expenses and
Fund Expenses will be allocated among the classes of shares based on their
relative net asset values. Approved Class Expenses shall be allocated to the
particular class to which they are attributable. In addition, certain expenses
may be allocated differently if their method of imposition changes. Thus, if a
Class Expense can no longer be attributed to a class, it shall be charged to the
Trust for allocation among classes, as determined by the Board of Trustees. Any
additional Class Expenses not specifically identified above which are
subsequently identified and determined to be properly allocated to one class of
shares shall not be so allocated until approved by the Board of Trustees of the
Company in light of the requirements of the Act and the Internal Revenue Code of
1986, as amended.
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6. EXCHANGE PRIVILEGES. Shares of one class of the Trust may be
exchanged for shares of that same class of any other Pilgrim Fund at NAV without
payment of any additional sales charge. However, a sales charge, equal to the
excess, if any, of the sales charge rate applicable to the shares being acquired
over the sales charge rate previously paid, may be assessed on exchanges from
the Trust. If a shareholder exchanges and subsequently redeems his or her
shares, any applicable Contingent Deferred Sales Charge fee will be based on the
full period of the share ownership.
7. CONVERSION FEATURES. A shareholder's Class B shares will
automatically convert to Class A shares in the Trust on the first business day
of the month in which the eighth anniversary of the issuance of the Class B
shares occurs, together with a pro rata portion of all Class B shares
representing dividends and other distributions paid in additional Class B
shares. The conversion of Class B shares into Class A shares may be subject to
the continuing availability of an opinion of counsel or an Internal Revenue
Service ruling to the effect that (1) such conversion will not constitute
taxable events for federal tax purposes; and (2) the payment of different
dividends on Class A and Class B shares shares, respectively, does not result in
the Trust's dividends or distributions constituting "preferential dividends"
under the Internal Revenue Code of 1986. The Class B shares so converted will no
longer be subject to the higher expenses borne by Class B shares. The conversion
will be effected at the relative net asset values per share of the two Classes.
8. QUARTERLY AND ANNUAL REPORTS. The Trustees shall receive quarterly
and annual statements concerning all allocated Class Expenses and distribution
and servicing expenditures complying with paragraph (b)(3)(ii) of Rule 12b-1, as
it may be amended from time to time. In the statements, only expenditures
properly attributable to the sale or servicing of a particular class of shares
will be used to justify any distribution or servicing fee or other expenses
charged to that class. Expenditures not related to the sale or servicing of a
particular class shall not be presented to the Trustees to justify any fee
attributable to that class. The statements, including the allocations upon which
they are based, shall be subject to the review and approval of the independent
Trustees in the exercise of their fiduciary duties.
9. ACCOUNTING METHODOLOGY. (a) The following procedures shall be
implemented in order to meet the objective of properly allocating income and
expenses:
(1) On a daily basis, a fund accountant shall calculate the
Plan Fee to be charged to each 12b-1 class of shares by calculating the average
daily net asset value of such shares outstanding and applying the applicable fee
rate of the respective class to the result of that calculation.
(2) The Trust accountant will allocate designated Class
Expenses, if any, to the respective classes.
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(3) The Trust accountant shall allocate income and Corporate
Level and Fund Expenses among the respective classes of shares based on the net
asset value of each class in relation to the net asset value of the Trust for
Fund Expenses, and in relation to the net asset value of the Company for
Corporate Level Expenses. These calculations shall be based on net asset values
at the beginning of the day.
(4) The Trust accountant shall then complete a worksheet,
developed for purposes of complying with this Section of this Plan, using the
allocated income and expense calculations from Paragraph (3) above, and the
additional fees calculated from Paragraphs (1) and (2) above. The Trust
accountant may make non-material changes to the form of worksheet as it deems
appropriate.
(5) The Trust accountant shall develop and use appropriate
internal control procedures to assure the accuracy of its calculations and
appropriate allocation of income and expenses in accordance with this Plan.
10. WAIVER OR REIMBURSEMENT OF EXPENSES. Expenses may be waived or
reimbursed by any adviser to the Company, by the Company's underwriter or any
other provider of services to the Company without the prior approval of the
Company's Board of Trustees.
11. EFFECTIVENESS OF PLAN. This Plan shall not take effect until it has
been approved by votes of a majority of both (a) the Trustees of the Company and
(b) those Trustees 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, cast in person at a meeting (or
meetings) called for the purpose of voting on this Plan.
12. MATERIAL MODIFICATIONS. This Plan may not be amended to modify
materially its terms unless such amendment is approved in the manner provided
for initial approval in paragraph 11 hereof.
13. LIMITATION OF LIABILITY. The Trustees of the Company and the
shareholders of the Trust shall not be liable for any obligations of the Company
or the Trust under this Plan, and Distributor or any other person, in asserting
any rights or claims under this Plan, shall look only to the assets and property
of the Company or the Trust in settlement of such right or claim, and not to
such Trustees or shareholders.
Dated: July 26, 2000
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