You fly the Bandit. Get within 5 m of the Lady before the Guard gets within 5 m of you, and before mission time runs out at 240 s. Everyone is in low orbit around Kerbin, so thrust follows orbital mechanics: burn prograde and you speed up but also climb, so pair it with radial in to fly level at the Lady. The dotted line shows where you will coast, and the Coast pass readout says how close that gets you.
KSPDG's LBG1 score is closest Lady distance² + 10⁶ ÷ (closest Guard distance + 0.1). Lower is better.