Guardian Investment Management LLC

Fees and Compensation
Individual Clients:                            Institutional Accounts:
       1% on the first         $2,000,000      $1-10 million 7.5/10ths of 1 %
       7.5/10ths of 1% above $2,000,000        > $10 million     6/10ths of 1%
Fees are negotiable, depending on the equity/bond allocation in the portfolio. We
compute the fees based on the portfolio valuation as of the end of each quarter, and
the fees are for the following three months, so they are paid in advance. If the
investment management contract is canceled during the quarter, the client will
receive a refund for the pro-rated number of days remaining during the quarter.
Most of our clients’ quarterly fees are deducted from the custodian account. A few
clients are billed directly per their request. Clients who have chosen to have a bank
custodian may also pay a custodian fee. Our fees are based only on the assets under
management. The minimum account size that we accept is $1,000,000, although
smaller accounts are accepted on occasion. We do not use performance based fees.

In addition to investment management fees, clients will pay commissions to their
broker / custodian upon the purchase or sale of an investment (see Broker Practices
on page 6). In most cases, investment management fees are deducted directly from
clients' accounts by Guardian Investment and clients receive a "notification only"
bill. We believe these fees are similar to those charged by many other investment
counseling firms for similar services; however, comparable service may be
available from other sources for lower fees.
Performance Based Fees and Side-by-Side Management
Performance-based fees are based on a share of capital gains on or capital
appreciation of the client’s assets. Guardian does not use a performance-based fee
structure because of the potential conflict of interest. Performance-based
compensation may create an incentive for the adviser to recommend an investment
that may carry a higher degree of risk than is suitable for the client.

Types of Clients
Although most of our clients are individuals, some clients are trusts, charitable
foundations, retirement plans, estates, and corporations. Minimum dollar valuation
for starting an account is $1,000,000. Under special circumstances, smaller
accounts are occasionally accepted.

Methods of Analysis, Investment Strategies and Risk of Loss
We are long-term investors – not speculators – and our investment philosophy is
conservative in nature. However, clients should recognize that investing in any type
of stock or bond security poses some level of risk. In our initial discussion with
potential clients we will quantify and discuss the volatility inherent in investing in
more detail. Individual securities in specific and, more broadly, economic,
environmental, political and market developments can result in the value of
investments declining. There is no guarantee of investment return and past
performance is no guarantee of future success.
Our investment approach consists of fundamental analysis, as opposed to technical
or quantitative strategies. We study company financial statements and reports,
industry trends and conditions, and general business conditions. Principal sources
of information are (1) the company's annual report, prospectus, Form 10-K and
press releases, (2) general business periodicals, newspapers and the internet, and
(3) analyst reports.
Core Investment Strategy
Guardian’s Core strategy for stock selection focuses on large, multi-national
companies domiciled in a G7 nation and traded on U.S. based stock exchanges
either as a domestic stock listing or as a depository receipt (ADR or ADS.)
Guardian seeks to identify companies that use shareholder capital in a disciplined
way, that have strong financial strength and attractive valuations in the market. We
screen from the 2,000 largest companies traded on domestic exchanges and then

apply both quantitative and qualitative filters to narrow the list to approximately 50
names from which we select the 30 to 35 most attractive holdings to use in client
accounts. Client holdings may vary greatly due to a variety of factors including but
not limited to legacy positions, unrealized capital gains, and personal preferences
in addition to suitability, risk tolerance and other factors.
Guardian may use covered call options to help clients diversify out of concentrated
positions and/or generate extra yield for those positions. For example, if a client
retires from working at a publicly traded company with a large holding in that
company’s stock, we can usually use covered calls to earn income on all or a portion
of that holding setting strike prices that the client is comfortable selling and
diversifying the holding at over time.
A small group of clients with greater risk tolerance and knowledge may request
covered call options in their taxable account, despite tax efficiency issues. We may
hold cash reserves when valuations are high and/or when clients request cash
positions.
Balanced Strategy
Guardian constructs and allocates client portfolios using a combination of stocks
and bonds. Typically, we maintain the stock portion of a client's total holdings with
a target of 60-70% of the total value of the account, but other targets are
occasionally utilized to meet specific client needs, objectives, age, and risk
tolerance. A typical clients’ total holdings would include 25 to 35 stocks.
The bonds or cash equivalents in a portfolio are intended, in part, to reduce
volatility. We select investment grade bonds - U.S. Government issues, municipal
bonds, and corporate bonds, although we have not recently invested in municipal
bonds given the rate environment. Usually, about 30 to 40 percent of a clients’
combined accounts are invested in bonds or cash equivalents. Assets not invested
in stocks or bonds may be invested in cash equivalents such as money market funds
and Treasury bills, to maximize short-term returns. We may hold cash reserves
when valuations are high and/or when clients request cash positions.