SERVICE AND DISTRIBUTION PLAN
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");
WHEREAS, shares of common stock of the Company currently consist of one
series, Pilgrim Global Income Fund (the "Trust");
WHEREAS, shares of common stock of the Trust are divided into classes of
shares, one of which is designated Class B;
WHEREAS, the Company employs Pilgrim Securities, Inc. as distributor of the
securities of which it is the issuer and may from time to time retain, pursuant
to the terms of a distribution agreement with such person (each, an
"Underwriting Agreement") other persons to so act pursuant to the Plan (each
such person so acting from time to time, the "Distributor");
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 Trust with respect to all Class B shares,
whether issued before or after the date hereof, as set forth hereinafter.
NOW, THEREFORE, the Company hereby adopts this Plan on behalf of the Trust
with respect to its Class B shares, in accordance with Rule 12b-l under the Act,
on the following terms and conditions:
1. A. The Trust shall pay to each Distributor, as compensation for acting
as principal distributor in respect of the Class B Shares (as hereinafter
defined) of the Trust its "Allocable Portion" (as hereinafter defined) of a fee
(the "Distribution Fee"), which shall accrue daily at the rate of 0.75% per
annum of the Trust's average daily net assets attributable to Class B Shares of
the Trust and be payable monthly or at such other intervals as the Trustees
shall determine, subject to any applicable restriction imposed by rules of the
National Association of Securities Dealers, Inc. ("NASD").
The Underwriting Agreement between the Company and each Distributor
relating to the Class B Shares shall provide that:
(I) the Distributor will be deemed to have performed all services
required to be performed in order to be entitled to receive
its Allocable Portion (as defined below) of the Distribution
Fee payable in respect of the Class B Shares upon the
settlement date of each sale of a "Commission Share" (as
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defined in the Allocation Schedule attached to the
Underwriting Agreement) taken into account in determining such
Distributor's Allocable Portion of such Distribution Fee;
(II) notwithstanding anything to the contrary in this Plan or the
Underwriting Agreement, the Trust's obligation to pay such
Distributor its Allocable Portion of the Distribution Fee
payable shall not be terminated or modified (including,
without limitation, by change in the rules applicable to the
conversion of Class B Shares into shares of another class) for
any reason (including a termination of the Underwriting
Agreement between such Distributor and the Trust) except:
(a) to the extent required by a change in the Investment
Company Act of 1940 (the "Act"), the rules and
regulations under the Act, the Conduct Rules of the NASD
or other applicable law, in each case enacted or
promulgated after ________ ___, 2000,
(b) on a basis which does not alter the Distributor's
Allocable Portion of the Distribution Fee computed with
reference to Commission Shares the Date of Original
Issuance (as defined in the Allocation Schedule attached
to the Underwriting Agreement) of which occurs on or
prior to the adoption of such termination or
modification and with respect to Free Shares (as defined
in the Allocation Schedule) which would be attributed to
such Distributor under the Allocation Schedule with
reference such Commission Shares,
(c) in connection with a "Complete Termination" (as
hereinafter defined) of the Plan; or
(d) on a basis, determined by the Board of Trustees of the
Company, including a majority of those who are not
"interested persons" of the Company (as such term is
defined in the Act), acting in good faith, so long as
from and after the effective date of such modification
or termination, neither the Company or any Affected Fund
(as hereinafter defined) nor Pilgrim Securities, Inc. or
any successor sponsor of the Affected Fund or any
affiliate of any of the foregoing, pay, directly or
indirectly, a fee, trailer fee, or expense reimbursement
to any person for the provision of shareholder services
to the holders of Class B Shares;
(III) the Trust will not take any action to waive or change any CDSC
in respect of the Class B Shares the Date of Original Issuance
(as defined in the Allocation Schedule attached to the
Underwriting Agreement) of which occurs, on or prior to the
taking of such action except as provided in the Trust's
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prospectus or statement of additional information on the date
such Commission Share was issued, without the consent of such
Distributor and its Transferees;
(IV) notwithstanding anything to the contrary in this Distribution
Plan or the Underwriting Agreement, neither the termination of
such Distributor's role as principal distributor of the Class
B Shares, nor the termination of such Underwriting Agreement
nor the termination of this Plan will terminate such
Distributor's right to its Allocable Portion of the CDSCs; and
(V) notwithstanding anything to the contrary in the Distribution
Plan or the Underwriting Agreement, such Distributor may
assign, sell or pledge (collectively, "Transfer") its rights
to its Allocable Portion of the Distribution Fees and CDSCs
and, upon receipt of notice of such Transfer, each Fund shall
pay to the assignee, purchaser or pledgee (collectively with
their subsequent transferees, "Transferees"), as third party
beneficiaries of such Underwriting Agreement, such portion of
such Distributor's Allocable Portion of the Distribution Fees
or CDSCs in respect of the Class B Shares so sold or pledged,
and except as provided in (II) above and notwithstanding
anything of the contrary set forth in this Plan or in the
Underwriting Agreement, the Trust's obligation to pay such
Distributor's Allocable Portion of the Distribution Fees and
CDSCs payable in respect of the Class B Shares shall be
absolute and unconditional and shall not be subject to
dispute, offset, counterclaim or any defense whatsoever, at
law or equity, including, without limitation, any of the
foregoing based on the insolvency or bankruptcy of such
Distributor.
For purposes of this Plan, the term "Allocable Portion" of
Distribution Fees or CDSCs payable in respect of the Class B Shares as applied
to any Distributor shall mean the portion of such Distribution Fees or CDSCs
payable in respect of such Class B Shares allocated to such Distributor in
accordance with the Allocation Schedule (attached to the Underwriting Agreement
as it relates to the Class B Shares). For purposes of this Plan and each
Distribution Agreement, the term "Complete Termination" of the Plan means a
termination of this Plan and every other distribution plan of the Trust for
Class B shares, each successor company or fund, and each company or fund
acquiring a substantial portion of the assets of the Trust (collectively, the
"Affected Fund") involving the complete cessation of the payment of Distribution
Fees in respect of all current Class B shares of the Affected Fund and each
future class of shares of the Affected Fund which has substantially similar
characteristics to the shares of the current Class B shares of the Trust,
including the manner of payment and amount of sales charge, contingent deferred
sales charge or other similar charges borne directly or indirectly by the
holders of such shares (all such classes of shares "Class B Shares").
B. In addition to the amount provided in 1.A. above, the Trust
shall pay to the Distributor, as the distributor of the Class B shares of the
Trust, a service fee at the rate of 0.25% on an annualized basis of the average
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daily net assets of the Trust's Class B 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 Trustees shall determine, subject
to any applicable restriction imposed by rules of the NASD.
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 Trust in
connection with any activities or expenses primarily intended to result in the
sale of the Class B shares of the Trust, 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 Trust. These
services may include, among other things, processing new shareholder account
applications, preparing and transmitting to the Trust'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 Trust and their transactions with the Trust. The
Distributor is also authorized to engage in advertising, the preparation and
distribution of sales literature and other promotional activities on behalf of
the Trust. In addition, this Plan hereby authorizes payment by the Trust 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 Trustees 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 or any agreements
related to it (the "Rule 12b-l Trustees"), 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 Trustees. The Plan shall
continue in full force and effect as to the Class B shares of the Trust for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3.
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5. The Distributor shall provide to the Trustees 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 Trust at any time, without payment
of any penalty, by vote of the Trustees of the Company, by vote of a majority of
the Rule 12b-l Trustees, or by a vote of a majority of the outstanding voting
securities of Class B shares of the Trust 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
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 B
shares of the Trust, 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 Trustees
who are not interested persons (as defined in the Act) of the Company shall be
committed to the discretion of the Trustees 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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