Exhibit (e)(2)

                      FORM OF 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 (the "Fund");

     WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class B;

     WHEREAS, the Company employs ING 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 this Service and
Distribution Plan (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 amend and restate the Plan with respect to
all Class B shares, whether issued before or after the date hereof, as set forth
hereinafter.

     NOW, THEREFORE, the Company hereby amends this Plan on behalf of the Fund
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 Fund shall pay to each Distributor, as compensation for acting
as principal distributor in respect of the Class B Shares (as hereinafter
defined) of the Fund 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 Fund's average daily net assets attributable to Class B Shares of
the Fund and be payable monthly.

               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 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 Fund's obligation to pay such
               Distributor its Allocable Portion of the Distribution Fee payable
               shall not be terminated or modified (including, without

               limitation, by a 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 Fund) 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 National Association of
                    Securities Dealers, Inc. ("NASD") or other applicable law,
                    in each case enacted or promulgated after April 30, 2001;

               (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; or

               (c)  in connection with a "Complete Termination" (as hereinafter
                    defined) of the Plan;

         (III) the Fund will not take any action to waive or change any
               contingent deferred sales charge ("CDSC") in respect of the Class
               B Shares, the Date of Original Issuance of which occurs, on or
               prior to the taking of such action except as provided in the
               Fund's prospectus or statement of additional information on the
               date such Commission Share was issued, without the consent of
               such Distributor and its Transferees (as hereinafter defined);

          (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 Fund'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.

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               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 Fund for Class B shares, each
          successor company or fund, and each company or fund acquiring a
          substantial portion of the assets of the Fund (collectively, the
          "Affected Funds") involving the complete cessation of the payment of
          Distribution Fees in respect of all current Class B shares of the
          Affected Funds and each future class of shares of the Affected Funds
          which has substantially similar characteristics to the shares of the
          current Class B shares of the Fund, 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"); provided that
          (a) the Directors of the Company, including the independent Directors
          of the Company, shall have determined that such termination is in the
          best interest of the Fund and the shareholders of the Fund, and (b)
          such termination does not alter the CDSC as in effect at the time of
          such termination applicable to Commission Shares of the Fund, the Date
          of Original Issuance of which occurs prior to such termination.

          B. In addition to the amount provided in 1.A. above, the Fund shall
pay to the Distributor, as the distributor of the Class B 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 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 Directors 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 Fund in
connection with any activities or expenses primarily intended to result in the
sale of the Class B 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 CDSCs 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.

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     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 B 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 B 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
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 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 5 hereof, for a period of
not less than six years from the date of this Plan, and any such agreement or
any such report, as the case may be, must be kept in an easily accessible place
for the first two years.

Dated: August 7, 2001

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