American Beacon Advisors Inc

Item 5 – Fees and Compensation

The specific manner in which fees are charged by American Beacon is established in a client’s
written agreement with American Beacon. Depending upon the type of account, American Beacon
generally bills its fees in arrears on a monthly or quarterly basis. For certain client accounts,
management fees are prorated for contributions and withdrawals of assets made to or from the
account during the applicable period. Accounts initiated or terminated during a billing cycle will
be charged a prorated fee. Except for the Beacon Funds, American Beacon does not have the
authority to deduct its fees from the clients’ custodial accounts. Upon termination of any account,
any earned, unpaid fees will be due and payable.

Investment Companies

American Beacon's agreements with the Beacon Funds provide for payment of annualized
investment management fees by the Beacon Funds to American Beacon for investment
management, administrative and clerical services provided by American Beacon to each Fund.
The fees paid to American Beacon by the Beacon Funds are determined by the type of Fund and
the number of sub- advisers and are computed daily and paid monthly from each Fund’s assets at
the annual rates as percentages of that Fund’s average daily net assets. In addition, American
Beacon receives a percentage of the net monthly income generated from securities lending
activities of certain Beacon Funds for its oversight of the securities lending activities. American
Beacon also receives shareholder servicing fees from the Beacon Funds, depending on the share
class, which are paid to intermediaries for servicing of shareholder accounts.

Certain share classes of the Beacon Funds pay distribution (Rule 12b-1) fees to American Beacon’s
affiliated broker-dealer for distribution and shareholder servicing related services provided to the
Beacon Funds. The Rule 12b-1 fees offset expenses that American Beacon would otherwise bear
in distributing the Beacon Funds. The distribution fees are paid pursuant to Distribution Plans that
have been approved by the Board of Trustees of the Beacon Funds. The plans are “compensation
plans” meaning that the Beacon Funds pay a specified level of compensation for distribution and/or
shareholder service-related activities, regardless of whether American Beacon or its affiliates
expends more or less than this amount on distribution efforts. However, all Rule 12b-1 fees received
by American Beacon’s affiliated broker-dealer from the Beacon Funds are utilized to pay expenses
under the Distribution Plans, such as expenses relating to selling efforts of various broker-dealers,
shareholder servicing fees and the preparation and distribution of advertising material and sales
literature. In addition, American Beacon commits certain of its own resources to pay for various
Beacon Fund promotional activities, which are unreimbursed by the Beacon Funds. Certain sub-
advisers also make payments to support the Beacon Funds’ distribution activities and potentially
defray American Beacon's expenses. See item 10 below for more information on the conflict of
interest this presents.

Fees charged to the Beacon Funds are generally calculated and accrued daily and paid monthly in
arrears. American Beacon periodically waives fees or reimburses expenses otherwise payable by
the Beacon Funds. Accordingly, actual fees may differ from contractual rates.

Employee Benefit Plans

American Beacon has no basic fee schedule for its employee benefit plan management services.
American Beacon’s investment management agreement with the Plans provides that the Plans will
pay American Beacon a monthly fee in arrears equal to the product of the month-end assets, the
applicable fee rate and the actual number of days in the month, divided by the actual number of days
in the year. The monthly fee is offset, consistent with applicable regulations, by any investment
advisory fees and by certain other fees described in the agreement that are collected by American
Beacon or its affiliates from commingled funds affiliated with American Beacon in which such
month-end assets are invested. Fees for some Plans are governed by the applicable Prospectus and
any applicable Shareholder Services Agreement between the Plans and American Beacon.

Collective Investment Trusts

American Beacon has no basic fee schedule for its collective investment trust services. American
Beacon’s Sub-Advisor Agreement for the CITs provides that American Beacon shall receive an
annualized sub-advisory fee paid from total fee collected from the CITs by the trustee. The fees
are accrued daily and paid quarterly in arrears from the net asset of the CITs.

Separate Accounts

American Beacon’s standard fee schedule for separate accounts is generally at the rate of 0.10%
per annum on the first $250 million in assets, 0.06% on the next $250 million, and 0.04%
thereafter. Irrespective of the amount of assets managed, a minimum annual fee of $30,000 is
charged for separate accounts. American Beacon’s fees are negotiable. American Beacon may
negotiate lower fee arrangements in certain circumstances, including situations when: there is a
likelihood of significant growth of assets in the account; the prospective client is in a new industry
or marketplace; the client is an affiliate of American Beacon; or interest rates are so low that a
lower fee may be justified. A single client and its affiliates with assets in more than one investment
vehicle managed by American Beacon and/or its affiliates may have its assets aggregated for fee
calculation purposes and/or be charged a lower fee rate with respect to assets maintained in one or
more accounts. Fees are normally based upon a percentage of the average daily market value of
assets under management calculated on a 365-day basis. Fees charged are generally payable
monthly or quarterly in arrears.

Other Types of Fees and Expenses
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Item 7 – Types of Clients

American Beacon provides investment advisory services to investment companies (the Beacon
Funds), corporate employee benefit plans, collective investment trusts, corporations and
governmental entities. For separate accounts, American Beacon generally requires a minimum
of $100 million to open an account, although it has discretion to waive the minimum in certain
circumstances. The CITs are available only to qualified employee benefit plans. Minimum
investments and other eligibility requirements for the Beacon Funds and the CITs are governed by
the organizational and disclosure documents of each of those funds.