8001 Franklin Farms Drive, Suite 208 Richmond, VA 23229

Phone: 804.288.6080 | Fax: 804.288.6082www.redmondassetmanagement.com

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Firm Overview

Redmond Asset Management (RAM) seeks to deliver top-notch client service and above average investment returns by purchasing publically traded stocks that we believe offer superior risk adjusted long term opportunities for growth of capital.

Founded by Scott Redmond in December 2005.

As of June 30, 2013 RAM had firm assets of approximately $170 million.

Located in Richmond, Virginia.

Organizational Chart

Investments Operations

Scott Redmond, CFAFounder

Small Cap Core Portfolio Manager & Lead AnalystLead Portfolio Manager

Jamie AlexanderChief Compliance Officer,

Marketing, Operations

Tom Robertson, CFASmall Cap Core Analyst

Portfolio Manager

Jeremy Kirkland, CFASmall Cap Core Analyst

Portfolio Manager

Jim Jollay Equity Strategist

Analyst

Margaret PhillipsClient Service,

Trader,Operations

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Full bios found on pages 25-26

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Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

Two Phase Growth Plan

Individual SMA Clients Small Cap Core Institutional SMAs

AUM

Jeremy Kirkland Jim Jollay

Tom Robertson

PHASE I

Develop Bedrock Business

Create Small Cap Track Record

Status: COMPLETE

PHASE II

Grow Small Cap Core

Maintain Bedrock Business

Status: JUST STARTING

Marketing Commitment

Soft Close $300M

Hard Close $500M

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Markel Corporation

On July 1, 2013 Markel Corporation (ticker MKL) became our largest client1

Tom Gayner, Co-President and CIO, has long been a friend to RAM; now is squarely in our corner. We feel our resources have expanded meaningfully

It is not exactly a bad thing that our largest client is, in our opinion, a far superior investor AND has a vested interest in our success

Markel Corp. does not have an equity stake in RAM, but will benefit from our growth

Classic Win/Win, in our opinion

1 It is not known whether the listed client approves or disapproves of Redmond Asset Management, LLC or the advisory services provided.

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Return History1,2,3

RAM Small Cap Gross Return (%)

RAM Small Cap Net Return (%)

Russell 2000® Total Return (%)

2012 22.4 21.2 16.4

2011 -0.6 -1.6 - 4.2

2010 33.7 32.4 26.9

2009 45.4 44.0 27.2

2008 - 46.4 -47.0 - 33.7

2007 4.1 3.1 - 1.6

1 Past performance is not indicative of future performance. Client investment returns will be reduced by the advisory fees and other expenses it may incur. Advisory fees are negotiable. 2 GIPS Compliant Presentation found on page 28.3 Returns are shown in U.S. Dollars.

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Annualized Returns1,2,3

Ending 31 Dec 2012

1-Year3-Year

Annualized5-Year

Annualized

RAM Small Cap Gross Return

22.4% 17.6% 4.9%

RAM Small Cap Net Return

21.2% 16.4% 3.8%

Russell 2000®Total Return

16.4% 12.3% 3.6%

1 Past performance is not indicative of future performance. Client investment returns will be reduced by the advisory fees and other expenses it may incur. Advisory fees are negotiable. 2 GIPS Compliant Presentation found on page 28.3 Returns are shown in U.S. dollars.

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Firm Ownership and Compensation

Scott Redmond founded the firm, owns 100% of the firm, and serves as the benevolent dictator

Meritocratic Compensation (don’t bother asking for the formulas)

I. The source of revenue is the source of compensation

A. Analysts are evaluated on long term performance of recommendations vs. the benchmark and the proprietary screen

B. Portfolio Managers are evaluated vs. Analyst Recommendations

C. Analysts and Portfolio Managers may earn a portion of New Business/Client Retention revenues

Succession Plan

II. Key Person Insurance exists for Scott Redmond and Jeremy Kirkland

III. Should Scott Redmond die

A. Chief Legal Counsel becomes interim CEO

B. Resources are in place for an orderly transfer of ownership and responsibilities

Core Investment Beliefs

Components of Persistent Long Term Alpha

I. High Active Share

II. Low to Moderate Tracking Error

III. Low Turnover

IV. No Factor Bets

V. Investing is More Art Than Science

(More UC Berkley than Caltech)

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Science Behind Our Beliefs

I. “Research shows that funds with high active share and moderate tracking error deliver excess

returns on average.”1

II. Active Share2

A. “Active Share significantly predicts fund performance relative to the benchmark.”2

B. “We also find strong evidence of performance persistence for funds with highest Active Share.”2

C. “Active Share has greatest predictive power for returns among small-cap funds.”2

III. Proprietary Analysis by RAM

1Michael J. Mauboussin, “Mauboussin on Strategy”, February 24, 2012 http://www.petajisto.net/media/20120224lm.pdf.

2K. J. Martijn Cremers and Antti Petajisto, “How Active Is Your Fund Manager? A New Measure That Predicts

Performance,” March 31, 2009 http://www.petajisto.net/research.html

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Manage to High Active Share and Low/Moderate Tracking Error Portfolios

I. NO FACTOR BETS

II. Ownership of Industry Dominant or Distinguished Companies

A. Diversify by business, not by GICS Sector Code

B. Reduced Systematic Risk

III. Long term exposure to “Antifragile*” Companies

*The term “antifragile” was introduced by Nassim Taleb

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Stock Selection

I. Overwhelmingly RAM seeks ownership of

A. Industry Dominant Companies

B. Distinguished Companies

II. Stocks usually originate from a Proprietary Screen, but may come from other sources

III. Up to 5% of the portfolio is allocated to immature or speculative companies

IV. The Process is 90% fundamental and 10% quantitative

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Equity Investment Philosophy

I. Find long term investments in Great Growth Companies through Bottom-Up Stock Picking

II. Great Growth Companies exhibit the following:

A. Outstanding Management and Corporate Culture

B. Industry or Niche Dominance

C. High or Rapidly Growing RAM Margins*

D. Disciplined use/reinvestment of cash

III. We believe our stocks could outperform the stock market over the long run because:

A. Cash generation creates wealth for the company

B. Prudent reinvestment of that cash increases company wealth even more!

C. Eventually, an increase in company wealth may translate into proportionately higher stock prices

*a proprietary calculation

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RAM Margin

Proprietary Calculation Adjusted Cash Flow – Adjusted Cost of Capital

Adjusted Invested Capital

What It Means To Us

Consistently positive RAM Margins may indicate:

A well run company

Operating in a Niche, or

Dominating an industry

Rapidly rising RAM Margins may indicate:

Change in competitive landscape

Past investments starting to pay off

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Typical Investment Process

2000 Company Universe

Four Screens

RAM Margin

Fundamental Growth

Relative Strength of Stock Price

Earnings Estimate Revisions

200 CandidateCompanies

Fundamental Analysis

Growth Prospects Competitive Advantage Corporate Culture

Return Expectations

Earnings Based Cash Flow Based

Portfolio Considerations

Sector Weight Liquidity

50-70 Stock

Portfolio

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Equity Sell Disciplines

I. Fundamental

A. Loss of confidence in management

Results in complete sale

B. Fundamental deterioration

We usually scale out as evidence of deteriorating fundamentals builds

II. Price Related

A. Overvaluation

We usually scale out as the stock becomes overvalued

B. Monitor holdings for absolute and relative performance

We do not use price targets

Portfolio Construction

Broad Ensemble of Industry Dominant or Distinguished Companies (50-70 stocks)

I. Drivers (3%-7% weight per stock)

A. Deep knowledge of and strong conviction in the company

B. Compelling risk return of the stock

II. Core Positions (1.25%-3% weight per stock)

A. Solid Companies

B. Stocks have attractive risk return potential

III. Incubators (<1.25% weight per stock)

A. General inclination toward the stock

B. Immature or speculative companies

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Portfolio Diversification

Simple yet comprehensive approach

I. Business

A. Unique, distinguished ,or dominant companies will rarely compete for the same dollar of revenue

B. For example, in Dec 2011 our top four financial holdings represented 20% of the portfolio and included a debt collector, a BDC, a

bank, and a specialty insurer

C. GICS sector codes are irrelevant

II. Growth Rate

A. Wide range of short and long term projected growth rates

B. Boring businesses hit inflection points, exciting businesses keep momentum., and “Steady Eddies” plod along

III. Stock Chart

A. Wide range of general stock chart patterns

B. Stocks do not normally move together

IV. Valuation

A. Wide range of valuations

B. Some are not as expensive as they appear, some are very cheap, and others are fairly priced and you get the growth rate of

earnings

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Ownership Mentality

Year First Purchased

% by weight*

% by count

2007 24 20

2008 13 9

2009 10 15

2010 15 21

2011 19 22

2012 10 13

*as of 12/31/2012. Cash was 9% by weight.

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True long term investors

Know what we own and why we own it

Opportunity to know companies well over time

Our Primary Short Run Risks To Relative Performance

I. Low and Increasing Market Dispersion*

II. Speculative Bubble

III. Junk Rally

* We would like to acknowledge the influence of the Antti Petajisto, “Active Share and Mutual Fund Performance”, December 2010 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1685942

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General View of Risk

I. To RAM Risk Is A Function Of1:

A. The amount of money you stand to lose

B. The likelihood of the loss occurring

II. Greatest Source of Risk Is Ourselves

III. To RAM Risk Is Not1:

A. Price Volatility

B. Beta, Correlation, Tracking Error etc…

1We would like to acknowledge the influence of the greater works of Seth Klarman

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Managing Risk

I. Simplified Investment Process1: A. Accentuates roll of skill versus luck in long run outcomes1

B. Anchored to Core Beliefs

II. Limit AUMA. Wider spectrum of investable ideas

B. Soft Close at $300M

C. Hard Close at <$500M

III. Check Lists1

A. Prior to Purchase

B. Monitoring Existing Holdings

IV. Maintain a log of various thoughts1 • oddly the most valuable log is “if we are wrong it will probably unfold like…”1

V. Active Introspection of Behavioral Biases and Cognitive Errors1

1We would like to acknowledge the influence of the greater works of Michael Mauboussin

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Adaptation of Heisenberg Uncertainty Principal

I. In our words: Measurement Perturbs

• Werner Heisenberg concluded you cannot simultaneously precisely know both the location and speed of

a particle, because to measure one perturbs the other

II. Too frequently measuring the performance of a long term strategy perturbs the investment

process… if you are human!

III. We believe in the science behind our art

IV. We grind through process, aware of performance

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Fee Structure1

Asset Amount Annual Fee

Less than $50,000,000 1.00%

Greater than $50,000,000 0.85%

1 Fees are negotiable

Investment Team

R. Scott Redmond, CFA Jeremy Kirkland, CFA Tom Robertson, CFA

RAM

Founder

Small Cap Core Portfolio Manager &

Lead Analyst

Lead Portfolio Manager

Small Cap Core Analyst

Portfolio Manager

Joined RAM in 2006

Small Cap Core Analyst

Portfolio Manager

Joined RAM in 2012

Experience

The Capital Management Corporation, 2002 – 2005

Director of Research Portfolio Manager

Godsey & Gibb Associates, 1998 – 2002

Portfolio Manager, Research Analyst, Sales Associate

Financial Analyst at HCA Healthcare Inc.

Dynegy, Inc

Gardner & Robertson, President and Co-Owner

Anderson & Strudwick, served in various roles over 30 years: President, CEO, Director of Research, CCO, and CFO.

Education

Washington & Lee University BA Chemistry, 1994 Philadelphia College of Osteopathic

Medicine, MS, 1996

Washington & Lee UniversityBA Economics, 2002

University of VirginiaB.S. Commerce, 1968

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Operations Team

Jamie Alexander Margaret Phillips

RAM CCO, Marketing, Trading, Operations Joined RAM in 2010

Client Service, Trading, Operations Joined RAM in 2012

Experience

Analyst at StreetAccount, LLC, Jackson Hole, WY – 3 yrs. A subscription based financial news website.

Jackson State Bank & Trust, Jackson Hole, WY – 1 yr. Accounting and Commercial Loan Support

Gardner & Robertson Anderson & Strudwick Legg Mason Davenport & Company

Education University of Virginia

BA History, 2005 University of Virginia

BA Anthropology, 1980

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Third-Party Relationships and Services

Custodians Legal Support GIPS Verification Critical Software

BB&T Charles Schwab Fidelity Merrill Lynch

Sterne Agee SunTrust TD Ameritrade Wells Fargo

Christian & Barton, LLP Alpha Performance Verification Services

Thomson Reuters Captools Microsoft 365

Sub-Advisory and Wrap Program Relationships Compliance

GARP Strategy offered via Merrill Lynch Managed Account Service (MAS)

RAM’s GARP Strategy is offered via Sterne Agee Investment Advisor, Inc. and via a model portfolio to a local money manager.

RAM provides equity portfolio management services to a local money manager.

ACA Compliance

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Redmond Asset Management, LLC Small Cap Composite 

1 January 2007 through 31 December 2012 

YearEnd

Composite Gross Return (%)

Composite Net-of-Fee Return (%)

Benchmark Return

(%)

Composite 3-Yr St Dev

(%)

Benchmark 3-Yr St Dev

(%)

InternalDispersion

(%)

Number of

Portfolios

Composite Assets($ M)

Firm Assets($ M)

2007 4.1 3.1 -1.6 n/a n/a n/a ≤ 5 0.40 34.2

2008 -46.4 -47.0 -33.7 n/a n/a n/a ≤ 5 0.21 39.4

2009 45.4 44.0 27.2 33.9 25.2 n/a ≤ 5 0.31 79.6

2010 33.7 32.4 26.9 36.7 28.1 n/a ≤ 5 0.41 100.9

2011 -0.6 -1.6 -4.2 30.7 25.4 n/a ≤ 5 0.41 119.7

2012 22.4 21.2 16.4 20.5 20.5 n/a ≤ 5 0.50 154.5Redmond Asset Management, LLC (referred to as RAM) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. RAM has been independently verified for the periods 1 January 2007 through 31 December 2012. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Small Cap composite has been examined for the periods 1 January 2007 through 31 December 2012. The verification and performance examination reports are available upon request.Notes:1 Redmond Asset Management, LLC is an independent, SEC registered investment management firm located in Richmond, VA and is not affiliated with any parent organization. RAM was founded in 2005 and registered with the SEC on 12/22/2005. The company offers investment management services for equity, balanced and fixed income portfolios to corporate, institutional, and individual investors. The firm is wholly owned by the founding principal, R. Scott Redmond, CFA. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.2 The Small Cap Composite includes all discretionary portfolios that are managed according to RAM's Small Cap investment strategy. The strategy uses a bottom-up stock selection approach to identify fifty to seventy small capitalization companies with high quality management teams, industry and/or niche dominance, with historical and continuing high returns on invested capital and reinvested cash. The firm defines small cap companies as those with market capitalizations less than $2 billion, or those companies with market capitalizations no larger than the most recently reported market capitalization of the largest constituent of the Russell 2000 Index. There is no account minimum restriction for the composite.3 The performance benchmark for the composite is the total return of the Russell 2000® Index, as reported by Russell Investments. The composite returns may be significantly more or less volatile than the benchmark returns. 4 Valuations are computed and performance is reported in U.S. dollars.5 Composite Gross Returns are presented before management and custodial fees but after all trading expenses. Composite Net-of-Fees Returns are presented after all custodial fees, trading expenses and management fees. Net-of-fee returns are calculated using actual management fees, which are accrued on a quarterly basis. Composite and benchmark returns are presented gross of withholding taxes except for foreign tax withholding on ADR securities. The standard fee schedule for the composite is 1.00% on the first $50 million. Fees are negotiable.6 This composite was created in June 2009. A list of composite descriptions is available upon request.7 R. Scott Redmond, CFA has served as the lead portfolio manager of the small cap strategy since inception. In July 2012, RAM hired Tom Robertson, CFA who now serves as an analyst for the Small Cap strategy and manages our new Growth at a Reasonable Price “GARP” strategy. RAM’s total firm assets increased significantly because many of Tom’s existing clients transferred with him. 8 The three-year annualized standard deviation measures the variability of the composite gross returns and the benchmark returns over the preceding 36-month period. The three-year annualized standard deviation is not presented for 2007 and 2008 because the composite did not yet have 36 monthly returns as of that date. 9 RAM has adopted a significant cash flow policy for the Small Cap Core Composite. When an external cash flow exceeds 10% of an account's value, that cash flow is segregated into a temporary account until the funds are invested according to the composite strategy or disbursed.

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Appendix: Current Business Overview

$170 Million AUMClassification Small Cap Mid Cap Large Cap

Fixed Income

NormalRanges $30 - 45M $35 – 50M $50 – 80M $5 -15M

Account Types

Small CapProduct

All Cap and Balanced Separately Managed Accounts

(primarily HNW individuals with a personal connection to a RAM employee*)< $1M $170M

SMA Product Individually Tailored SMAs GARP Model

*Stable and Enduring Business

*RAM and its employees are under no financial pressure; we can be patient!

Resource Allocation

SALES AND MARKETING

through 2012 HNW - primarily by word of mouth - 95%Small CapDatabases

after 2012 Small Cap Core Product - 100%

Past, Present and and Future

RESEARCH

Small Cap50 - 60%

Mid Cap20 - 30%

Large Cap20 - 30%

Fixed Income1 - 3%

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Disclaimers

Past performance is no guarantee of future results.

Information provided in this brochure is for educational and illustrative purposes only and should not be construed

as individualized investment advice. We recognize that each client’s investment needs and goals are different,

and that the investments or strategies discussed herein may not be suitable for all investors. Any opinions or

estimates contained in this brochure constitute the judgment of Redmond Asset Management, LLC (RAM) as of

this date (June 30, 2013) and are subject to change without notice.