GOVERNING PRINCIPLES

We are interested in developing a meaningful long-term relationship with everyone who shows confidence in us by entrusting their capital to our care. We attempt through strict adherence to the governing principles detailed below to attract those who expect to stay with us a long period of time. While we acknowledge the necessity of generating acceptable long term results which justify such a long term horizon, we think that an equally important determinant to sustaining a successful long term relationship with our investors is ensuring that they have an adequate understanding of our principles of operation including both our objectives and our limitations. We think these governing principles are what set us apart from many other investment alternatives and we believe that the understanding and acceptance of these principles by our unitholders will afford us a sustainable competitive advantage in our efforts to generate superior investment returns for them.

Our governing principles are:

1. The interests of our unitholders always come first.

   We know that if we serve our unitholders well, our own success will follow. While no investment manager can guarantee results, we do promise that we will exercise a standard of care that we would expect to receive in similar circumstances. This means acting with the ultimate professionalism in all situations and being ever mindful that our reputation rests on honesty, integrity, confidentiality, meticulous attention to detail and humility.

2. We will adhere to our stated investment philosophy at all times and under all market conditions.

   We want every investor in our funds to have an appropriate understanding of our investment philosophy and the investment approach we utilize in managing the capital they entrust to our care. We strongly encourage anyone considering an investment in our funds to become familiar with our published investment philosophy.
   
   Experience has taught us that executing our investment approach is more of a marathon than a sprint. It is definitely a long term journey where we expect to encounter the occasional bump on the road. We believe that investors will most likely stick with us if they know what to expect. We also hope that our unitholders will derive comfort from the knowledge that we will not deviate from our stated investment approach.
   

3. Our only economic goal is to maximize the compounded annual return for our unitholders over the long term while always minimizing the risk of permanent capital impairment.

   We want our unitholders to both eat well and sleep well. While we are as interested in hitting investment home runs as anyone else, we also want to ensure that we don't strikeout. We measure success against this goal by our relative performance and not by whether we are plus or minus in any year. We believe that a year in which we are down 10% while the overall market is down 20% to be a better performance than a year in which we advance significantly at the same rate as the overall market. We know that good relative results will lead to good absolute results over time.

   While no individual or even handful of benchmark indexes can serve as a perfect indicator of representative returns from the overall market, we have established the goal of outperforming both the S&P/TSX Composite Total Return Index, which is the most widely accepted Canadian market benchmark, and the S&P 500 Total Return Index, which is the most common benchmark of U.S. market performance, over the long term. We make no attempt to ensure that our investments closely mirror these indexes and we do not expect to beat both of these benchmarks every year. Our experience suggests that our best relative results against both of these benchmarks will most often occur during periods of declining or static markets while our worst relative results, but not absolute results, will be during periods where markets are showing significant advances. While there are certain to be good years and bad years both relatively and absolutely, we are focused on achieving this performance objective over the long term for our unitholders.

   While our thinking is that ten years or even more represents a true long term horizon, we believe that five years is the minimum time period that constitutes long term. Ideally, any measurement period should include both a strong and weak market performance to be truly representative. We would discourage anyone with less than a five year view from committing their capital to our funds.

4. We want to do well for ourselves only when we do well for you.

   The majority of our compensation is derived from our pay for performance arrangement with our fund unitholders. This arrangement not only rewards us for superior returns, but penalizes us for poor results. While not ensuring success, we would like to think that this emphasis on pay for performance more closely aligns our interests with those of our investors than most other investment alternatives. This arrangement also forces us to act frugally with respect to the ongoing operating expenses of our funds and to continually look for ways to appropriately reduce costs. Further, because we have no third party marketing affiliations, there are no sales charges to purchase or redeem units in our funds.

5. We will always keep all of our personal investment capital invested in our funds.

   Put simply, we eat our own cooking. We want our investors to know that our capital is invested on exactly the same basis as their capital. When our investment results are poor, we hope that our unitholders will derive some comfort from the fact that we will also be suffering in a similar fashion. At present, the firm’s partners and their immediate family members are collectively the largest unitholders in both the Stacey Muirhead Limited Partnership and the Stacey Muirhead RSP Fund.

6. We see ourselves as investment focused rather than marketing driven.

   Quite simply, we do not measure our success by the size of assets under administration. We are always more concerned with generating excellent investment returns on the assets we already manage than we are with gathering additional assets under management. Consistent with this view, we will close our funds to new investors rather than allow excess capital to dilute our long term investment performance. If we must make a choice, we would rather be the best than the biggest.

7. We embrace a standard of candid and fair reporting in all of our written communication with our unitholders.

   Our overriding reporting mindset is one of presenting our unitholders with the information we would want to know if the roles were reversed. In defining candid, we mean presenting all of the pluses and minuses needed to make an informed judgment about our operations and results. By fair, we mean taking all reasonable steps to ensure that everyone receives the same information at the same time.

8. We will conduct an annual meeting each year at which we will report fully on our operations and results to our unitholders.

   We think that it is essential for our investors to have an opportunity to meet face to face with the people who are responsible for allocating their capital once each year to receive an honest and candid report on our operations and results. We are also pleased to answer all questions anyone may have at the annual meeting. However, it is not always possible for us to meet with our unitholders at other times throughout the year. While we will always do our best to meet the needs of all of our unitholders, we believe that our time and effort is best spent engaged on the investment process.