<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
FREMONT GENERAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FREMONT GENERAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LOGO]
FREMONT GENERAL CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 1996
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
Fremont General Corporation (the "Company") will be held in the Wedgewood Room
of the Miramar Sheraton Hotel, 101 Wilshire Boulevard, Santa Monica, California
90401, on Thursday, May 9, 1996 at 2:00 p.m., for the following purposes:
1. To elect a Board of seven (7) Directors to serve until the next Annual
Meeting or until their successors have been elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as independent auditors;
and
3. To transact such other business as may be properly brought before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on March 22, 1996 will be
entitled to vote at said meeting or any adjournment thereof. A list of such
stockholders shall be open to the examination of any stockholder at the meeting
and for a period of ten days prior to the date of the meeting at the executive
offices of Fremont General Corporation, 2020 Santa Monica Boulevard, 6th Floor,
Santa Monica, California 90404.
Stockholders are requested to specify their choices, date, sign, and return
the enclosed proxy in the enclosed envelope, to which no postage need be affixed
if mailed in the United States. If you plan to attend the meeting and wish to
vote your shares personally, you may do so at any time before the proxy is
voted.
All stockholders are cordially invited to attend the meeting.
/s/ ALAN W. FAIGIN
--------------------------------
Alan W. Faigin, Secretary
April 9, 1996
<PAGE> 3
FREMONT GENERAL CORPORATION
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Fremont General Corporation, a Nevada Corporation
(hereinafter called the "Company" or "Fremont General"), of proxies to be used
at the Annual Meeting of Stockholders to be held on May 9, 1996 (the "Annual
Meeting"), and at any adjournments thereof. A form of proxy is enclosed for use
at the meeting. Unless contrary instructions are indicated on the proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
not revoked before they are voted) will be voted for the election of the seven
nominees for directors named below, and for the other proposals discussed
herein. As to any other business which may properly come before the meeting and
be submitted to a vote of stockholders, proxies received by the Board of
Directors will be voted in accordance with the best judgment of the holders
thereof.
A proxy may be revoked at any time before it is exercised by giving written
notice of revocation to the Secretary of the Company or by submitting prior to
the time of the meeting a properly executed proxy bearing a later date.
Stockholders having executed and returned a proxy, who attend the meeting and
desire to vote in person, whether by proxy, voice vote or ballot, are requested
to so notify the Secretary of the Company prior to the time of the meeting.
The Company will bear the cost of solicitation of proxies. In addition to
the use of mails, proxies may be solicited by personal interview, telephone or
telegraph, by officers, directors and other employees of the Company. The
Company will also request persons, firms and corporations holding shares in
their names, or in the names of their nominees, which are beneficially owned by
others, to send or cause to be sent proxy material to, and obtain proxies from,
such beneficial owners and will reimburse such holders for their reasonable
expenses in so doing. The Company has also engaged Georgeson and Company, Inc.,
Wall Street Plaza, New York, New York, to aid in the solicitation of proxies for
which the Company will pay an estimated fee of $6,000 plus reimbursable
out-of-pocket expenses.
The principal executive office of the Company is 2020 Santa Monica
Boulevard, 6th Floor, Santa Monica, California 90404. The approximate date when
this Proxy Statement and form of proxy are being first sent to stockholders is
April 9, 1996.
1
<PAGE> 4
VOTING SECURITIES AND VOTE REQUIRED
The close of business on March 22, 1996 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting of Stockholders or any adjournments
thereof.
Shares of common stock, of which 25,393,145 shares were outstanding as of
March 22, 1996, are the only voting securities of the Company. Unless otherwise
noted, all statistics as to stock ownership are given as of March 22, 1996. Each
stockholder of record at the close of business on March 22, 1996 is entitled to
one vote for each share of common stock then held on each matter to come before
the meeting. There is no cumulative voting with respect to the election of
directors. The presence in person or by proxy of persons entitled to vote a
majority of the voting shares at any meeting shall constitute a quorum for the
transaction of business. If such quorum is present, the affirmative vote of the
majority of the shares represented and voting at the Annual Meeting (which
shares voting affirmatively also constitute at least a majority of the required
quorum) shall be the act of the stockholders, unless otherwise required by law
or by the Articles of Incorporation.
Votes cast by proxy or in person at the Annual Meeting will be counted by
the persons appointed by the Company to act as election inspectors for the
meeting. The election inspectors will treat shares represented by proxies that
reflect abstentions or include "broker non-votes" as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
Abstentions or "broker non-votes" do not constitute a vote "for" or "against"
any matter and thus will be disregarded in the calculation of "votes cast." If a
broker or nominee has indicated on the proxy that it does not have discretionary
authority to vote certain shares (i.e., "broker non-votes"), those shares will
be treated as not present and not entitled to vote with respect to that matter
(even though those shares may be considered entitled to vote for quorum purposes
and entitled to vote on other matters).
Any unmarked proxies, including those submitted by brokers or nominees,
will be voted in favor of the proposals and nominees of the Board of Directors,
as indicated in the accompanying proxy card.
ITEM 1
ELECTION OF DIRECTORS
At the Annual Meeting, seven (7) Directors are to be elected to serve until
the next annual meeting of stockholders and until their respective successors
are elected and qualified. The shares represented by the enclosed proxy will be
voted for the election of the nominees named below as Directors, unless
authority to vote for Directors is withheld. If any nominee for any reason
presently unknown cannot be a candidate for election or if a vacancy should
occur before the election (which events are not anticipated), the shares
represented by valid proxies will be voted in favor of the remaining nominees
and may be voted for the election of a substitute nominee recommended by the
Board of Directors (or the number of authorized directors may be reduced).
2
<PAGE> 5
The information set forth below as to each nominee for Director has been
furnished to the Company by the respective nominees for Director:
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS
EXPERIENCE DURING PAST
FIVE YEARS AND CERTAIN DIRECTOR
NAME AGE OTHER DIRECTORSHIPS SINCE
---- ---------------------------------------- ---------
<S> <C> <C> <C>
James A. McIntyre(3) 63 Chairman and Chief Executive Officer of 1972
the Company.
Wayne R. Bailey 41 Executive Vice President, Treasurer and Nominee
Chief Financial Officer of the Company
since May 1995; Senior Vice President
and CFO of the Company, from February
1994 to May 1995; Vice President and CFO
from 1990 to 1994. Director and officer
of subsidiary companies during the past
10 years.
Dr. Houston I. Flournoy(1)(2) 66 Special Assistant to the President for 1977
Governmental Affairs, University of
Southern California since August 1981;
Professor, University of Southern
California from 1973 to 1993; Director
and member of Finance and Audit
Committees of Lockheed-Martin
Corporation, a manufacturer of aircraft;
Director and a member of the Audit and
Compensation Committees of Tosco
Corporation, an oil refiner.
C. Douglas Kranwinkle(3) 55 Senior Partner, O'Melveny & Myers since 1973
January 1989.
David W. Morrisroe(1)(2) 63 Formerly Vice President, Business and 1989
Finance and Treasurer, California
Institute of Technology; Director,
Huntington Memorial Hospital Board;
Member, Huntington Library Investment
Committee; Member, NASA Space Telescope
Institute Council; Member, National
Optical Observatories Board; Trustee
Emeritus, University of San Diego.
Louis J. Rampino 43 President and Chief Operating Officer of 1994
the Company; Director and officer of the
Company and certain subsidiary companies
during the past 13 years; employee for
18 years.
Dickinson C. Ross(1)(2) 72 Retired; formerly Chairman of Johnson & 1987
Higgins of California, an international
insurance brokerage firm.
</TABLE>
- ---------------
(1) Member of the Audit Committee (Mr. Morrisroe, Chairman), which meets
periodically with management, the independent public accountants and the
internal auditors to make inquiries regarding the manner in which the
responsibilities of each are being discharged and reports thereon to the
Board of Directors. The Audit Committee also recommends for the approval of
the Board of Directors and ratification by the shareholders, the annual
appointment of the independent public accountants with whom the Audit
Committee reviews the scope of the audit and non-audit assignments and the
related fees, the accounting principles being applied by the Company in
financial reporting, the scope of internal financial auditing procedures,
and the adequacy of internal controls. The Audit Committee met four (4)
times during 1995.
3
<PAGE> 6
(2) Member of the Compensation Committee (Mr. Ross, Chairman), which reviews and
makes recommendations to the Board of Directors with respect to the
Company's various compensation programs and administers the Company's stock
option plan. The Compensation Committee met four (4) times during 1995.
(3) Member of the Executive Committee (Mr. McIntyre, Chairman), which has the
authority to exercise the powers of the Board of Directors in the management
of the Company in accordance with the policy of the Company when said Board
is not in session, except for actions specifically required by statute to be
performed by the full Board. There were no meetings of the Executive
Committee during 1995.
There were four (4) meetings of the Company's Board of Directors during
1995. No nominee for Director who served as a director during the past year
attended fewer than 75% of the aggregate of the total number of meetings of the
Board of Directors and the total number of meetings of committees of the Board
of Directors on which he served. There is no nominating committee of the Board
of Directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED ABOVE.
COMPENSATION OF DIRECTORS
In addition to a monthly fee of $2,000, a per-meeting fee of $1,500 is paid
to Directors who are not also employees of the Company or any of its
subsidiaries for serving as such and for attending regular meetings of the Board
and meetings of the various committees on which they are members, plus
reimbursement for the actual expenses incurred to attend such meetings.
Non-employee Directors also receive $1,500 for each special meeting attended. No
additional compensation is provided for committee members, nor are Directors who
are also employees of the Company or any subsidiary paid compensation for
serving as Directors or members of committees of the Board.
The Board has adopted a retirement plan for non-employee Directors who
serve at least five (5) years and achieve age sixty-five (65). Under the plan,
the Company will continue paying monthly service fees at the then-current rate
for three (3) years after a director's retirement, or in a lump sum at the
discretion of the Board. Such benefits as remain owing are extended to the
surviving spouse of a Director who dies prior to retirement or during the three
(3) year period thereafter. Age restrictions for current sitting Directors were
grandfathered.
Under the Company's 1989 Non-Qualified Stock Option Plan, as amended (the
"1989 Plan"), each non-employee Director was granted automatically on May 14,
1992, May 13, 1993, May 12, 1994 and on May 11, 1995, a non-qualified stock
option to purchase 6,188 shares of the Company's common stock at the exercise
price of $8.889, $13.435, $14.321 and $15.682 per share, respectively. The
number of shares and exercise prices have been adjusted to reflect the effect of
stock splits and a stock dividend distributed by the Company subsequent to the
grant dates of the respective stock options. The purchase price per share of
common stock covered by each such option granted to a non-employee Director, was
the fair market value of the common stock on the date the option was granted.
The options are exercisable at the rate of 25% per annum commencing on the first
anniversary of their grant, and, unless earlier exercised or terminated, will
expire ten (10) years after they are granted and are subject to a price
reduction feature approved by the shareholders in 1994. (See footnote (g) on
page 10.)
4
<PAGE> 7
OFFICERS AND COMPENSATION
The following table sets forth the names, ages, employment dates and
positions of the executive officers and certain other officers of the Company
and the date each became an officer of the Company (or its predecessor
companies). All executive officers have been with the Company for over five (5)
years and have served as officers of the Company and its subsidiary companies.
Executive officers are elected annually.
<TABLE>
<CAPTION>
EMPLOYEE OFFICER
NAME POSITION AGE SINCE SINCE
- ---------------------- -------------------------------------- ---- -------- -------
<S> <C> <C> <C> <C>
McIntyre, James A.(1) Chairman of the Board, & 63 1963 1963
Chief Executive Officer
Rampino, Louis J.(1) President & Chief Operating Officer 43 1977 1989
Bailey, Wayne R.(1) Executive Vice President, 41 1986 1989
Treasurer & Chief Financial Officer
Meyers, Raymond G. Senior Vice President & Chief 49 1980 1989
Administrative Officer
Faigin, Alan W.(1) Secretary & General Counsel 39 1980 1994
Little, James E. President & Chief Executive 46 1979 1979(2)
Officer, Fremont Compensation
Insurance Group(2)
Tenney, Robert N.(1) President & Chief Executive Officer, 54 1989 1989(2)
Fremont Financial Corporation(2)
Zoota, Murray President & Chief Executive Officer, 51 1977 1983(2)
Fremont Investment & Loan(2)
</TABLE>
- ---------------
(1) Messrs. McIntyre, Rampino, Bailey and Tenney are directors, and Messrs.
McIntyre, Rampino, Tenney and Faigin are officers, of Fremont Funding Inc.,
a wholly owned subsidiary of the Company which has securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934. Directors and
officers of Fremont Funding, Inc. are elected annually.
(2) Wholly owned subsidiaries of the Company.
STATEMENT OF THE COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that might incorporate
future filings, including this Proxy Statement, in whole or in part, the
following report and the Performance Graph on page 12 shall not be incorporated
by reference into such filings or any future filings, except to the extent the
Company specifically incorporates this report or the graph referenced therein,
and the report and the graph shall not be deemed soliciting material or
otherwise deemed filed under either of such Acts.
The compensation policy of the Company with respect to its executives and
employees has long been and continues to be focused on paying for performance
and results. This policy includes all forms of compensation -- base salary,
bonuses, stock options, benefits and perquisites. Particular emphasis has been
placed by the Compensation Committee (the "Committee") on linking compensation
to pre-tax earnings targets.
The Committee is provided with reports and data developed by internal
Company staff and by retained outside compensation consultants with access to
extensive industry data in the compensation area. Also, at the request of the
Committee, the Company occasionally retains the services of a
5
<PAGE> 8
leading nationally recognized consulting firm to review its compensation
practices in keeping with the stated policy of the Committee. The Company
retained Towers Perrin in 1992 and in 1993 to review the Company's executive
compensation practices, and Towers Perrin reported that the Company's
compensation practices are comparable to those of companies in the various
market indices reported in the Performance Graph (page 12) which have similar
businesses, size, and performance.
The Executive Compensation program for officers of Fremont General is
composed of three basic components tied to objective performance standards: (1)
base salary, (2) annual cash bonus opportunity, and (3) long term cash and stock
ownership opportunity. The Company's compensation policy is to pay its
executives for performance at rates which are above the averages of compensation
survey data reported by insurance, financial and diversified financial services
organizations of comparable size and structure.
Compensation Limitations. Under Section 162(m) of the Internal Revenue
Code, adopted in August, 1993, and proposed regulations adopted thereunder,
publicly-held companies may be precluded from deducting certain compensation
paid to an executive officer in excess of $1,000,000 in a year, excluding from
this limit performance-based compensation. The Committee has considered the
potential future effects on the Company of Section 162(m) and does not currently
anticipate changing its policy solely for the purpose of qualifying such
compensation as performance-based within the meaning of Section 162(m).
BASE SALARY
Base salary represents only a portion of each executive's total targeted
cash compensation opportunity each year. Individual annual performance criteria
are used to annually adjust the base salary.
MANAGEMENT INCENTIVE COMPENSATION PLAN (ANNUAL BONUS PLAN)
The Company places significant emphasis on attaining predetermined earnings
targets. It provides each executive with an opportunity to earn an annual bonus
upon the Company's achievement of those goals.
Bonus "targets" represent the balance of each executive's total targeted
annual cash compensation opportunity, and range from 15% to 50% of each
executive's base salary. These individual "target" bonus amounts are set by the
Committee based on available total annual compensation survey data to reflect
the ranking and relative level of contribution to results each executive is
expected to make. Actual bonuses earned can range from half of the executive's
"target" amount for performance at the minimum acceptable earnings level as set
by the Committee, to a maximum of three (3) times the "target" amount for
results substantially in excess of the Company's goals.
LONG-TERM COMPENSATION
In addition to annual compensation considerations, the Company has adopted
three (3) forms of long-term compensation which focus the executives on
increasing stockholder value over the long term.
-- The Long-Term Incentive Compensation Plan ("LTICP") provides for a
bonus opportunity dependent upon the Company achieving a cumulative
pre-tax earnings target over a three year period. Executives of the
Company may be awarded earned bonuses in cash and/or in stock.
6
<PAGE> 9
-- The Non-Qualified Stock Option Plan of 1989, as amended (the "1989
Plan") also provides a long-term compensation opportunity for the
officers of the Company and certain key subsidiary executives. The
participants ("Optionees") accrue exercise rights at the rate of 25%
per year, beginning on the first anniversary of each grant.
In determining the number of options to grant each executive, the
Committee considered a variety of methods used including a target
gain projection, a present value calculation and a structure based
on executive salary grades or salary multiples. The Committee opted
to use a salary multiple calculation model, which is common practice
where grants are staggered over three to five years.
The Committee's intent in utilizing these methods, coupled with the
four-year vesting schedule on each grant, was to enhance the
long-term nature of this program and to achieve its goal of linking
the financial interests of the executives very closely to those of
the shareholders.
-- The 1995 Restricted Stock Award Plan ("RSAP") was approved by the
Board of Directors in November 1995 and the officers of the Company
were authorized to acquire in the open market, approximately 800,000
shares of Company common stock to fulfill the requirements of the
RSAP. The RSAP became effective upon adoption by the Board in
November 1995 and will continue in effect for a term of ten (10)
years, unless earlier terminated.
The RSAP is administered by the 1995 Restricted Stock Award Plan
Committee (the "RSAP Committee") appointed by the Board of
Directors. Stock awards may be made to employees, as designated by
the RSAP Committee, who hold executive or key management positions
with the Company or its subsidiaries. Participants are entitled to
all the rights of stockholders with respect to shares awarded to
them under the RSAP, including the right to vote such shares and to
receive cash and stock dividends, subject to the restrictions
imposed by the RSAP. The purpose of the RSAP is to provide for the
award by the Company of common stock to participants to increase
shareholder value and to promote the success of the Company's
business by (a) motivating participants to perform to the best of
their abilities, and (b) increasing the desire of participants to
continue their employment with the Company.
No shares were awarded under the RSAP in 1995.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Specifically, with respect to the compensation of James A. McIntyre,
Chairman and Chief Executive Officer, the Committee reports:
1. Base Salary -- Mr. McIntyre's base salary in 1995 was $684,648, which
accounted for approximately 40% of his total annual compensation earned
in 1995. This amount is within the 50th-75th percentile of salaries paid
to CEO's in companies of comparable-size in the diversified financial
services industries.
2. Annual Bonus -- Mr. McIntyre was awarded an annual bonus for 1995 of
$979,674 pursuant to the 1995 Management Incentive Compensation Plan
which accounts for approximately 58% of the total annual compensation
Mr. McIntyre earned in 1995. This bonus is equal to 143% of his 1995
base salary rate and results from the Company's achievement of pretax
profit in 1995 of $100,000,000, over 119% of the goal set by the
Committee at the beginning of 1995.
7
<PAGE> 10
3. Long Term Incentive Compensation Plan ("LTICP") -- Mr. McIntyre's Long
Term Incentive Compensation Plan bonus was $1,099,260. This "three year"
plan was adopted by the Board and approved by the shareholders in 1993,
and provided for bonus opportunity dependent upon the Company achieving
a cumulative pre-tax earnings target from 1993 through 1995. The bonus
amount at the maturity of the LTICP was equal to the cash value of a
predetermined number of shares of Company stock. The number of shares
used to calculate this bonus was determined by the Board in 1993 based
upon his salary, divided by the stock price on January 3, 1993 (as
adjusted for stock splits and stock dividends).
4. Other Compensation -- In 1995, other compensation paid to Mr. McIntyre
included Company contributions into the Investment Incentive Plan,
Supplemental Executive Retirement Plan, Employee Stock Ownership Plan
and Excess Benefits Plan (collectively, $194,693), and contributions to
fund supplemental medical and life insurance ($28,260).
The Company entered into an employment agreement with Mr. McIntyre in 1994
which replaced a prior agreement. This agreement ensures that the Company will
continue to have Mr. McIntyre's services available to it pursuant to the
agreement's terms which are described on page 15.
The Committee's policies with respect to executive compensation for the
four (4) other executive officers of the Company are substantially the same as
those applied to Mr. McIntyre on an appropriate scale based upon scope of
responsibility and job rank. Each of these four executives received annual base
salaries, annual bonuses, long-term bonuses, and other compensation as reported
in the Summary Compensation Table (page 9) on substantially the same basis as
were applied to the CEO, at lesser rates.
It remains the policy of the Compensation Committee to compensate
executives of the Company based principally on achievement of pre-tax earnings
targets in an effort to enhance shareholder value on a long term basis.
The tables that follow disclose details of compensation paid to the
executives of the Company in 1995, as well as that paid in the previous two
years. Descriptions of the Company's retirement plans, stock option plans and
the restricted stock award plans follow.
Dickinson C. Ross, Chair Houston I. Flournoy
Kenneth L. Trefftzs David W. Morrisroe
8
<PAGE> 11
The following table and accompanying notes summarize the aggregate
compensation paid by the Company, and the stock option grants awarded in each of
the preceding three years, to its Chief Executive Officer and the four most
highly compensated executive officers serving at the end of fiscal 1995 (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
- ----------------------------------------------------------------------- ---------------------
(E) AWARDS PAYOUTS
OTHER --------------------- (I)
ANNUAL (F) (G) (H) ALL OTHER
(A) (B) (C) (D) COMPENSATION OPTIONS LTICP($) COMPENSATION
NAME/POSITION YEAR SALARY($) BONUS($) ($) (1) (2) PAYOUTS ($)
- ------------------------ ---- --------- -------- ------------ ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James A. McIntyre, 1995 684,648 979,674 $ 28,260 -- 1,099,260 $ 194,693
Chairman and CEO 1994 610,832 500,700 24,521 77,550 -- 137,053
1993 661,177 550,000 15,575 61,215 -- 182,830
Louis J. Rampino, 1995 544,121 653,116 4,839 -- 774,468 121,237
President and COO 1994 411,409 300,400 4,262 69,300 -- 79,363
1993 368,715 319,500 4,143 31,845 -- 108,558
Wayne R. Bailey, 1995 391,127 464,438 4,694 -- 599,508 85,073
Executive Vice 1994 325,481 200,250 4,532 49,500 -- 54,687
President, Treasurer 1993 259,838 200,000 3,722 17,325 -- 71,239
and CFO
Raymond G. Meyers, 1995 286,217 319,301 6,605 -- 444,600 66,164
Sr. Vice President and 1994 258,686 166,875 6,229 33,000 -- 45,526
Chief Administrative 1993 221,281 168,000 5,438 9,405 -- 61,532
Officer
Edward J. Lieber (3) 1995 277,477 98,133 3,888 -- 353,700 44,016
Secretary and 1994 200,132 76,095 3,596 4,950 -- 32,403
General Counsel 1993 192,146 81,000 3,240 8,415 -- 35,410
</TABLE>
- ---------------
(1) Column "(f)" refers to Restricted Stock Awards and is not applicable for
1995. SAR's are not applicable.
(2) Options reported here are stated on a "post split" basis.
(3) Retired effective December 31, 1995.
SUMMARY COMPENSATION TABLE -- EXPLANATIONS
(c) SALARY includes all regular wages paid to the executive, including cash
automobile allowances, and includes any amount which was voluntarily deferred by
the executive pursuant to the INVESTMENT INCENTIVE PLAN (the "401(k) Plan")
and/or the SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the "SERP").
(d) BONUS reflects cash compensation paid pursuant to the Company's MANAGEMENT
INCENTIVE COMPENSATION PLAN. Bonuses under this Plan are awarded upon the
achievement of annual pre-tax earnings targets as determined by the Board at the
beginning of each Plan year. Pre-tax earnings in a range of 80% to 120% of the
predetermined target create a pool for bonuses. Individual executive
participants are awarded amounts from this pool derived from calculating
variable percentages of their base salaries. The percentage of salary for each
executive is a function
9
<PAGE> 12
of the ranking of each job as determined by the Chief Executive Officer and the
Compensation Committee, based on independent compensation studies.
(e) OTHER ANNUAL COMPENSATION includes amounts paid on behalf of the executive
to provide for supplemental medical and life insurance. In addition to these
amounts, the executive officers of the Company may receive "perquisites" and
other personal benefits. The aggregate amounts of such personal benefits do not
exceed $50,000 or 10% of the annual salary and bonus reported for any executive
officer.
(f) In November 1995, the Board of Directors approved the 1995 RESTRICTED STOCK
AWARD PLAN, however, no awards were made in 1995. (See page 15 for a description
of the RSAP.)
(g) OPTIONS represent the numbers of shares of common stock for which options to
purchase were granted during each of the last three fiscal years. The options
vest in installments at the rate of 25% per year, pursuant to the terms of the
1989 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED (the "1989 Plan"). Options
granted pursuant to the terms of the 1989 Plan include a price reduction feature
which was approved by the shareholders in 1994. On the fifth anniversary of the
date of grant, and on each successive anniversary thereafter, until such option
is either exercised or expires, the exercise price for unexercised vested shares
is automatically reduced by one-sixth ( 1/6) of the original exercise price, as
adjusted from time to time for stock dividends and stock splits. See the
description of the 1989 Plan (page 15) and the option chart (page 11).
(h) LTICP PAYOUTS represent bonuses earned pursuant to the LONG-TERM INCENTIVE
COMPENSATION PLAN ("LTICP") adopted by the Board in 1993. This "three-year" plan
provided for bonus opportunity dependent upon the Company achieving a cumulative
pre-tax earnings target from 1993 through 1995. The bonus amount at the maturity
of the LTICP was equal to the cash value of a predetermined number of shares of
Company stock. The number of such shares used to calculate this bonus was
determined by the Board in 1993 based upon salaries (or salary grade midpoints)
divided by the stock price on January 3, 1993 (as adjusted for stock dividends
and stock splits). The Company's shareholders approved the LTICP in 1993, and in
1994 affirmed the calculation of bonuses thereunder using Company stock value.
(i) ALL OTHER COMPENSATION includes Company contributions to the executives'
accounts in the EMPLOYEE STOCK OWNERSHIP PLAN (the "ESOP") and the 401(k) PLAN,
both of which are "qualified defined contribution retirement benefit" plans
under the Internal Revenue Code (the "IRS Code") and to the SERP and the EXCESS
BENEFIT PLAN ("EBP"), both of which are "non-qualified" supplemental retirement
plans under the IRS Code. The amounts allocated to each executive officer in
1995 were:
<TABLE>
<CAPTION>
NAME ESOP 401(K) SERP EBP
- ---------- ------- ------ -------- ------
<S> <C> <C> <C> <C>
McIntyre $13,671 $5,850 $173,843 $1,329
Rampino 13,671 5,850 100,387 1,329
Bailey 13,671 5,850 64,223 1,329
Meyers 13,671 5,850 45,314 1,329
Lieber 13,671 5,850 23,166 1,329
</TABLE>
10
<PAGE> 13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
In 1995, there were no stock option grants to executive officers or to
employees pursuant to the terms of the 1989 Plan. Stock options were granted in
May 1995 to non-employee directors of the Company who received such options
pursuant to the non-discretionary grant provisions of the 1989 Plan.
The following table and accompanying notes summarize exercises of stock
options during 1995 by the Named Executive Officers and certain required
information regarding outstanding (unexpired) options held by them at the end of
fiscal 1995.
OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) VALUE OF UNEXERCISED*
NUMBER OF UNEXERCISED* IN-THE-MONEY OPTIONS
SHARES ACQUIRED OPTIONS AT FY-END(#) AT FY-END($)(1)(2)
ON EXERCISE VALUE REALIZED ----------------------------- -------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------- --------------- -------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
McIntyre 0 0 485,290 110,116 $ 8,073,378 $ 1,157,632
Rampino 0 0 190,410 79,034 $ 2,934,755 $ 817,208
Bailey 0 0 101,478 51,974 $ 1,508,956 $ 535,705
Meyers 0 0 72,663 32,856 $ 1,052,882 $ 335,782
Lieber 0 0 60,051 0 $ 1,003,079 $ --
------- ------- ----------- ---------- ----------- -----------
Total 0 0 909,892 273,980 $14,573,050 $ 2,846,326
======= ======= =========== ========== =========== ===========
</TABLE>
- ---------------
* Options and values reported in the table have been adjusted to reflect the
three-for-two stock split paid in February 1996.
(1) Options granted pursuant to the terms of the 1989 Plan include a price
reduction feature which was approved by the shareholders in 1994. On the
fifth anniversary of the date of grant, and on each successive anniversary
thereafter, until such option is either exercised or expires, the exercise
price for unexercised vested shares is automatically reduced by one-sixth
(1/6) of the original exercise price, as adjusted from time to time for
stock dividends and stock splits.
(2) VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS AT YEAR END represents the
difference between the market value at December 31, 1995 ($24.50, as
adjusted for the stock split) of unexercised options and the respective
exercise prices of the options. No representation regarding the "value" of
such options is intended.
No option granted to these executive officers pursuant to the 1989 Plan had
been exercised as of December 31, 1995.
11
<PAGE> 14
FREMONT GENERAL CORPORATION STOCK PRICE PERFORMANCE
The Stock Price Performance Graph below includes comparisons required by
the Securities and Exchange Commission (the "SEC") and shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Exchange Act, except to the extent Fremont General Corporation specifically
incorporates this information by reference, and shall not otherwise be deemed
soliciting material or filed under such Acts.
The graph below compares cumulative total return (i.e., change in stock
price plus reinvestment of dividends) of the Company's Common Stock measured
against the cumulative total return of the Wilshire 5000 Broad Index, and
specifically the Financial Sector Sub-Index of the Wilshire 5000 (the "Finance
Index"), which represent indices selected by the Company. The stock price
performance shown in this graph is not necessarily indicative of and not
intended to suggest future stock price performance.
FIVE YEAR CUMULATIVE RETURNS
<TABLE>
<CAPTION>
FREMONT
MEASUREMENT PERIOD GENERAL
(FISCAL YEAR COVERED) CORPORATION FINANCE INDEX WILSHIRE 5000
<S> <C> <C> <C>
1990 100 100 100
1991 175 152 134
1992 257 194 146
1993 285 218 163
1994 278 213 163
1995 496 319 222
</TABLE>
Assumes $100 invested on 12/31/90, as adjusted for stock splits and dividends.
12
<PAGE> 15
EMPLOYMENT AGREEMENTS
In 1994, the Compensation Committee recommended and the Board of Directors
approved an employment agreement (the "Agreement") with Mr. James A. McIntyre,
Chairman and Chief Executive Officer of the Company, replacing a prior such
employment agreement which expired on December 31, 1993. The Agreement provides
for a base salary of $600,000, subject to discretionary increases by the Board
of Directors of the Company beginning in 1995. Mr. McIntyre's annual
compensation rate was increased by the board from $550,000 to $600,000 in
February 1994, to $675,000 in February 1995 and to $700,000 in February 1996.
Mr. McIntyre also participates in all of the bonus and incentive compensation
plans and programs generally available to the senior management of the Company
as well as any employee benefit plan maintained by the Company for its
employees. In the event Mr. McIntyre's employment with the Company terminates
for any reason other than by the Company for cause or as the result of Mr.
McIntyre's death or total disability, Mr. McIntyre will receive a pro-rated
portion of his bonuses for the year in which he so terminates. In addition, Mr.
McIntyre will become a consultant to the Company. For the first five (5) years
of the consultancy, the Company will compensate Mr. McIntyre at an annual rate
equal to his base salary at the time his employment terminated. During that
period, Mr. McIntyre will also receive, whether by way of reimbursement, direct
compensation or otherwise, specified fringe and other benefits. After such
five-year period and for the remainder of Mr. McIntyre's life, Mr. McIntyre will
receive an annual amount equal to 50% of his base salary at the time his
employment terminated. In the event Mr. McIntyre's employment terminates as a
result of his disability, the Company will pay Mr. McIntyre, for life, an annual
amount equal to 50% of his base salary at the time his employment terminated,
offset by any disability benefits he receives. In the event of Mr. McIntyre's
death, the Company will pay his estate any earned but unpaid salary, vacation
pay and pro-rated bonus amounts accrued to the date of his death.
In November 1995, a trust established by Mr. and Mrs. James A. McIntyre
entered into an agreement with the Company whereby the Company, with the
approval of the Compensation Committee of the Board of Directors, agreed to make
advances of a portion of the premiums payable on a split dollar life insurance
policy purchased by the trust on the lives of Mr. and Mrs. McIntyre. The Company
will be reimbursed the full amounts advanced, without interest, upon the first
to occur of (a) the death of the survivor of Mr. and Mrs. McIntyre or (b) the
surrender of the policy. These advances are secured by a collateral assignment
of the policy to the Company. During the fiscal year ended December 31, 1995 the
Company advanced $393,596 toward the payment of such premium.
The Compensation Committee recommended and the Board of Directors approved
Employment Agreements with Messrs. Louis J. Rampino and Wayne R. Bailey. These
Agreements, which were effective as of February 8, 1996, have a term of three
(3) years, which term extends for an additional three (3) years if not
terminated on or before February 8, 1998. The material terms of these agreements
provide for base salaries as of the effective date of $550,000 for Mr. Rampino
and $450,000 for Mr. Bailey. These base salaries will be reviewed annually, and
may be increased or decreased at the Committee's discretion but not below these
levels. These executives will participate in any annual and/or longer term
incentive plan(s), as well as any retirement, welfare or other benefits made
available to other senior officers.
In the event of termination of employment, other than voluntarily or for
cause, but including death or total disability, the Company will pay the
executive (or his heirs) the equivalent of three (3) years' base salary at the
then-current rate, along with pro-rata portions of any annual and/or longer term
incentive plan(s). In addition, upon such a termination (other than as a result
of the executive's death) the executive will continue to be provided welfare and
other employee benefits for up to three years. The unvested and/or restricted
portion of any stock option or restricted stock held by the executive at the
time of such termination will accelerate in full so as to become
13
<PAGE> 16
completely vested and/or unrestricted. In the event the termination occurs
within the thirty-six (36) month period following a "Company Event" (as defined
below) a cash payment equal to the aggregate stock option exercise price
attributable to any then outstanding stock options shall be paid to the
executive.
The Company has also entered into a Management Continuity Agreement with
Mr. Raymond G. Meyers providing for accelerated vesting of stock options and
release of restricted stock upon a termination of employment following a Company
Event. This Agreement provides for a base salary of $290,000, which is to be
reviewed annually, and may be increased or decreased at the Committee's
discretion subject to the terms of this Agreement. This Agreement is not an
employment contract with a specified term, and any payments or benefits provided
for thereunder would only trigger upon a Company Event. Mr. Meyers will
participate in any annual and/or longer term incentive plan(s), as well as any
retirement, welfare or other benefits made available to other senior officers.
A "Company Event" is defined to have occurred when any one of the following
events occurs: (i) any "person" or "group" acquires 30% or more of the total
voting power represented by outstanding securities of the Company, or (ii) a
change in the composition of the Board of Directors occurring within a two-year
period as a result of which fewer than a majority of the Directors are Incumbent
Directors, or (iii) the stockholders approve a merger or consolidation of the
Company involving a 50% or more change in ownership of the total voting power
represented by the Company's outstanding securities, or (iv) the stockholders
approve a complete liquidation or sale of all or substantially all of the assets
of the Company or (v) James A. McIntyre, while serving as Chairman of the Board
of Directors, has a conservator of his person appointed or dies.
To the extent that any such payments trigger the excise tax pursuant to the
Internal Revenue Code Sections 2806 and 4999, the payments will be increased so
that after taxes, the net economic effect to such executive will be the same as
if the additional taxes imposed by Sections 2806 and 4999 did not apply to such
executive.
RETIREMENT AND OTHER BENEFIT PLANS
A. INVESTMENT INCENTIVE PLAN ("401(K) PLAN")
The 401(k) Plan has qualified as an employee retirement plan under Section
401(a) and 401(k) of the Internal Code of 1986 (as amended, the "IRS Code").
Participation is optional for employees once they are eligible to participate.
Under the 401(k) Plan, employees may elect to have from 2% to 15% of their
eligible compensation deferred and deposited with the plan trustee which will
invest the money at the employee's discretion among a variety of investment
funds including Company stock. Employee contributions of up to 6% of
compensation are matched by the Company at a rate determined annually by the
Board. In 1995, this matching rate was $.65 for every dollar contributed. All
employee contributions are 100% vested. Vesting in Company matching fund
contributions accrues over a period of years. Disbursement of the employee's
account balance will occur upon his retirement, termination of employment, total
disability or death. Shares of the Company's common stock held in the 401(k)
Plan and allocated to participants' accounts and are voted by the Plan's Trustee
upon instructions from the participants.
B. EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")
In 1989, the Company adopted the ESOP which is a qualified retirement plan
as defined by the Internal Revenue Service. Under the Plan, the Company
contributes cash and/or stock to be held in trust for eligible employee
participants. Contributions are made in such amounts as the Board deems
appropriate and reasonable, taking into account the financial performance of the
participating companies. In general, contributions have ranged between zero and
15% of the eligible
14
<PAGE> 17
compensation of each employee participant. The contributions allocated to each
eligible participating employee of participating companies are allocated as a
percentage of the employee's qualified earnings.
In 1990 and in 1993, the Board authorized the Company to loan funds to the
ESOP to finance the purchase of shares of Fremont common stock. In 1994, these
loans from the Company were refinanced through a term credit facility with First
Interstate Bank of California ("First Interstate") in the principal amount of
$11,000,000. In 1995, the amount of the term credit facility with First
Interstate was increased to $15,000,000. As of December 31, 1995, the
outstanding loan balance was $6,620,233. The First Interstate note is due in
seven (7) annual installments, commencing April 1, 1996. The First Interstate
note bears interest at a variable rate, currently 6.7% per annum.
As of December 31, 1995, the ESOP had 2,088,043 shares allocated to its
participants' individual accounts and 726,160 unallocated shares representing
8.2% and 2.9%, respectively, of the outstanding shares of common stock of the
Company on that date, as adjusted for stock dividends and stock splits. Shares
held by the ESOP are voted by the Plan Trustee upon instructions from the
participants to whose accounts the stock is allocated, and from the ESOP
committee appointed by the Board as to the unallocated shares of stock. The
committee is comprised of Messrs. James A. McIntyre, Louis J. Rampino, Raymond
G. Meyers, and Dickinson C. Ross. Benefits from the Plan are paid out upon
retirement, termination of employment, permanent disability or death.
C. SUPPLEMENTAL RETIREMENT PLANS (THE "SERPS")
The Supplemental and the Senior Supplemental Executive Retirement Plans
(collectively, the "SERPs") are mechanisms for providing full benefits to those
executives subject to IRS Code limitations on deferring eligible compensation
into the Company's 401(k) Plan. The SERPs are non-qualified plans within the
meaning of the IRS Code. Employee compensation deferrals under the SERPs may be
combined with the employee's 401(k) compensation deferrals up to 100% of total
eligible compensation. Compensation deferrals under the SERPs are deposited to a
grantor trust. The assets of the SERP remain those of the Company until the SERP
benefits are paid out upon retirement, termination, death or disability.
D. EXCESS BENEFIT PLAN ("EBP")
The Board adopted the EBP in 1990 as a mechanism to insure that
participants who are subject to IRS Code limitations on ESOP contributions
receive the full retirement benefit declared by the Board. Contributions to this
Plan as in the ESOP, are made in common stock. Pursuant to the terms and
conditions of the EBP, the combined contribution to both ESOP and EBP will not
exceed 25% of total compensation. Contributions under the EBP are deposited to a
Grantor Trust. The assets of the EBP remain those of the Company until the EBP
benefits are paid out upon retirement, termination, death or disability.
E. 1989 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED (THE "1989 PLAN")
In 1989 the Board adopted, and the shareholders approved, the 1989 Plan
which is administered by the Compensation Committee of the Board. Subsequently,
the Board adopted and the shareholders approved amendments to the 1989 Plan. The
1989 Plan provides long-term compensation opportunities for officers of the
Company and certain key subsidiary executives. Stock options have been granted
to such individuals in each year from 1989 to 1994, and provide for the right to
acquire shares of the common stock of the Company at a price based upon the fair
market value on the date of grant. On the fifth anniversary of the date of a
grant, and on each successive anniversary thereafter, until such option is
either exercised or expires, the exercise price for unexercised vested shares is
automatically reduced by one-sixth (1/6) of the original exercise price, as
adjusted from time to time for stock dividends and stock splits. In determining
the number
15
<PAGE> 18
of options to grant to each executive, the Committee has used a salary multiple
calculation which was set at levels consistent with the ranking of their
respective positions. Additional stock options may be granted from time to time
at the discretion of the Committee. Directors were granted stock options under
the non-discretionary provisions of the 1989 Plan in each year from 1989 to
1995. Stock options granted under the 1989 Plan have a term of ten (10) years,
and vest annually at the rate of 25% per year beginning on the first anniversary
of the date of grant.
F. 1995 RESTRICTED STOCK AWARD PLAN (THE "RSAP")
In November 1995, the Board of Directors approved the 1995 Restricted Stock
Award Plan. The RSAP became effective upon adoption by the Board in November
1995, and will continue in effect for a term of ten (10) years unless earlier
terminated. The purpose of the RSAP is to provide for the award by the Company
of common stock to participants to increase shareholder value and to promote the
success of the Company's business by (a) motivating participants to perform to
the best of their abilities, and (b) increasing the desire of such participants
to continue their employment with the Company. The RSAP's goals are to be
achieved by providing such participants with awards of restricted stock.
Subject to the provisions of the RSAP, the maximum aggregate number of
shares which may be sold under the RSAP is 800,000 shares. The shares are to be
reacquired common stock. If, pursuant to a RSAP Stock Award Agreement, shares
are forfeited to the Company, such shares will become available for reissuance
under the RSAP. The RSAP is administered by the 1995 Restricted Stock Award Plan
Committee (the "RSAP Committee") appointed by the Board of Directors. Stock
awards may be made to employees who hold executive or key management positions
with the Company or its subsidiaries, as designated by the RSAP Committee.
Participants are entitled to the rights of stockholders with respect to shares
awarded to them under the RSAP, including the right to vote such shares and to
receive cash and stock dividends, subject to the restrictions under the RSAP.
The number of shares of common stock which have been awarded under the RSAP
will be proportionately adjusted for any increase or decrease in the number of
issued shares of common stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the common stock, or any
other increase or decrease in the number of issued shares of common stock
effected without receipt of consideration by the Company. The Board may amend,
suspend, or terminate the RSAP from time to time in such respects as it may deem
advisable. Any such amendment or termination of the RSAP will not affect shares
already subject to Stock Award Agreements, except as provided therein. None of
the restricted shares or any beneficial interest therein may be transferred,
encumbered or otherwise disposed of in any way until such shares are released
from restriction and the Company's Reacquisition Option. Upon a Change of
Control of the Company, 100% of the shares awarded pursuant to the RSAP will
become unrestricted and will be released from the Company's Reacquisition
Option.
No shares were awarded under the RSAP in 1995. Pursuant to the RSAP, in
February 1996 the Company awarded to participants 666,310 shares of common stock
which had been acquired in the open market. In the event a participant's status
as an employee terminates before all of their shares have been released from
restriction, the Company has an option to reacquire any restricted shares
without the payment of further consideration (the "Reacquisition Option"). Ten
percent (10%) of the restricted shares awarded in February 1996 will be released
from the Company's Reacquisition Option and become unrestricted on each of the
ten (10) anniversaries of the award, commencing on January 1, 1997, provided
that the respective RSAP participant is still an employee on such dates. In
February 1996, the shares of Restricted Stock awarded to Messrs. Rampino, Bailey
and Meyers were 83,160 shares, 59,400 shares and 33,000 shares, respectively.
Neither Mr. McIntyre or Mr. Lieber were awarded shares of Restricted Stock as of
the date of this filing.
16
<PAGE> 19
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
Except as otherwise provided, the following table sets forth certain
information as of March 22, 1996, with respect to shares of the Company's Common
Stock held by the only persons known to the Company to be the beneficial owners
of more than five percent of such stock. For purposes of this Proxy Statement,
the term "beneficial ownership" of securities as used herein is defined in
accordance with the rules of the Securities and Exchange Commission and means
generally the power to vote or to exercise investment discretion with respect to
securities, regardless of any economic interests therein, or to acquire
securities on or within sixty (60) days of the applicable date of determination.
The shares represented in the table have been adjusted to reflect stock splits
and dividends. On March 22, 1996, the Company had outstanding 25,393,145 shares
of Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
---------------------
NAME AND ADDRESS NUMBER OF
OF STOCKHOLDER SHARES PERCENT
----------------- --------- -------
<S> <C> <C>
FMR Corp.(1)........................................... 3,226,737 12.7%
82 Devonshire Street
Boston, Massachusetts 02109
Merrill Lynch & Co., Inc.(2)........................... 2,270,791 8.9%
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
James A. McIntyre(3)................................... 2,055,475 7.9%
2020 Santa Monica Blvd.
Santa Monica, CA 90404
Maurine H. McIntyre, Trustee, The Padaro Trust(4)...... 1,485,000 5.8%
1633 26th Street, 3rd Floor
Santa Monica, CA 90404
Nicholas-Applegate Capital Management.................. 1,327,437 5.2%
600 West Broadway, 29th Floor
San Diego, CA 92101(5)
</TABLE>
- ---------------
(1) FMR Corp. has reported on in its Schedule 13G, dated February 8, 1996, that
it was the beneficial owner of such shares and stated that it has sole
voting power with respect to 670,185 such shares and no voting power with
respect to the remaining such shares, and sole dispositive powers with
respect to all such shares. FMR Corp. has stated that it has included in
such shares 1,367,415 which would result from the assumed conversion of
$70,910,000 principal amount of the Company's convertible Liquid Yield
Option Notes Due 2013. The Company is unaware of any subsequent change in
beneficial ownership.
(2) Merrill Lynch & Co., Inc. has reported on in its Schedule 13G, dated
February 8, 1996, that it was the beneficial owner of such shares and stated
that it has shared voting and dispositive powers with respect to such
shares. The Company is unaware of any subsequent change in beneficial
ownership. This does not include 726,160 unallocated ESOP shares of which
Merrill Lynch & Co., Inc. is Trustee, and which currently are pledged to
First Interstate Bank pursuant
17
<PAGE> 20
to the terms of the ESOP Loan described on pages 14 and 15. Unallocated
shares of stock are voted upon instructions from the ESOP committee
appointed by the Board of Directors.
(3) Represents 1,328,481 shares held by the James A. McIntyre Living Trust under
which Mr. James A. McIntyre is the trustee and holds a vested beneficiary
ownership, and 6,000 shares held by the James A. McIntyre Grandchildren's
Trust under which Mr. McIntyre is the trustee. Also includes 235,704 shares
owned directly or beneficially through the trustee(s) of the employee
retirement or other benefit plans and includes exercisable options to
purchase 485,290 shares on or within 60 days of the record date under the
1989 Plan.
(4) Consists of 1,485,000 shares held by the Padaro Trust of which Mrs. Maurine
H. McIntyre is trustee and life beneficiary. James A. McIntyre, her son, is
the remainder beneficiary of the Padaro Trust.
(5) Nicholas-Applegate Capital Management has reported on in its Schedule 13G,
dated February 7, 1996, that it was the beneficial owner of such shares and
stated that it has sole voting and dispositive powers with respect to such
shares. The Company is unaware of any subsequent change in beneficial
ownership.
The following table sets forth certain information as of March 22, 1996,
with respect to shares of the Company's Common Stock beneficially owned by each
nominee for director, director, Named Executive Officer and by all nominees,
directors, Named Executive Officers and executive officers as a group.
<TABLE>
<CAPTION>
COMMON
STOCK COMMON STOCK
NUMBER OF BENEFICIALLY
NAME SHARES(1) OWNED PERCENT
---- --------- -------------
<S> <C> <C>
James A. McIntyre.................................. 2,055,475(2,3) 7.9%
Wayne R. Bailey.................................... 242,703(2,4) *
Alan W. Faigin..................................... 38,914(2,5) *
Houston I. Flournoy................................ 19,310(6,7) *
C. Douglas Kranwinkle.............................. 19,595(6) *
Edward J. Lieber................................... 24,303(2,8) *
Raymond G. Meyers.................................. 167,717(2,9) *
David W. Morrisroe................................. 18,193(6) *
Louis J. Rampino................................... 396,118(2,10) 1.5%
Dickinson C. Ross.................................. 21,823(6) *
Kenneth L. Trefftzs................................ 25,702(11) *
All directors, nominees, Named Executive Officers
and executive officers as a group (11 persons)... 2,100,652(2-10) 11.5%
</TABLE>
- ---------------
* Less than 1%.
(1) Includes shares ("option shares") which directors, nominees, Named
Executive Officers and executive officers own directly or indirectly or
have a right to acquire on or within sixty (60) days of the record date
through the exercise of stock options granted under the 1989 Plan.
(2) Includes shares owned directly or beneficially through the trustee(s) of
the Company's various employee Retirement Benefit Plans (the "Plans").
Except for Messrs. McIntyre and Rampino, the percentages of shares
beneficially owned by any executive officer do not exceed one percent (1%)
of the Company's outstanding Common Stock. Mr. McIntyre owns
18
<PAGE> 21
2,055,475 shares or 7.9% of the Company's outstanding Common Stock, in
addition to his interest as remainder beneficiary of the Padaro Trust.
(3) Includes exercisable options, granted under the 1989 Plan, to purchase
485,290 shares on or within sixty (60) days of the record date and 235,704
shares held by the trustee under the Plans.
(4) Includes exercisable options to purchase 101,478 shares on or within sixty
(60) days of the record date and 76,133 shares held by the trustee under
the Plans. Also includes 59,400 restricted shares awarded in February 1996
pursuant to the RSAP.
(5) Includes exercisable options to purchase 1,238 shares on or within 60 days
of the record date and 29,426 shares held by the trustee under the Plans.
Also includes 8,250 restricted shares awarded in February 1996 pursuant to
the RSAP.
(6) Includes exercisable options to purchase 15,470 shares on or within 60 days
of the record date.
(7) In addition, Dr. Flournoy owns beneficially 175 shares, less than 1%, of
Fremont General Financing I (a wholly owned subsidiary of the Company) 9%
Trust Originated Preferred Securities (TOPrS)sm (service marks of Merrill
Lynch & Company.) Such securities are non-voting.
(8) Includes exercisable options to purchase 10,051 shares on or within 60 days
of the record date and 350 shares held by the trustee under the Plans. Mr.
Lieber retired effective December 31, 1995.
(9) Includes exercisable options to purchase 72,663 shares on or within 60 days
of the record date and 62,054 shares held by the trustee under the Plans.
Also includes 33,000 restricted shares awarded in February 1996 under the
RSAP.
(10) Includes exercisable options to purchase 190,410 shares on or within 60
days of the record date and 120,000 shares held by the trustee under the
Plans. Also includes 83,160 restricted shares awarded in February 1996
under the RSAP.
(11) Includes exercisable options to purchase 6,190 shares on or within 60 days
of the record date.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and holders of more than 10% of the Company's
Common Stock to file reports of ownership and reports of changes in ownership of
Common Stock and certain other equity securities of the Company with the SEC and
the New York Stock Exchange. The Company believes that during the period from
January 1, 1995 through December 31, 1995 its officers, directors and the holder
of more than 10% of the Company's Common Stock complied with all applicable
Section 16(a) filing requirements, except that Messrs. McIntyre, Lieber and
Treftzs each inadvertently filed one late report covering one transaction,
respectively. Each promptly filed a report after the need to do so came to their
attention. In making these statements, the Company has relied upon the written
representation of its directors and officers.
19
<PAGE> 22
ITEM 2
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of Ernst & Young LLP, independent certified public accountants,
has served as the Company's principal independent auditors since 1972, and is
familiar with the business and operations of the Company and its subsidiaries. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting and will have the opportunity to make a statement and will be available
to answer appropriate questions.
On November 9, 1995, upon recommendation of its Audit Committee, the Board
of Directors approved the firm of Ernst & Young LLP to be the Company's
independent certified public accountants for the year 1996, to audit the books
of account and records of the Company to make a report thereon to the
stockholders and the Board of Directors. Selection of Ernst & Young LLP as the
Company's auditors for the year 1996 will be submitted to the stockholders for
their approval at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ERNST &
YOUNG AS INDEPENDENT AUDITORS. Proxies given without instructions will be voted
FOR the proposal.
ANNUAL REPORT TO STOCKHOLDERS AND ADDITIONAL INFORMATION
The Annual Report of the Company for the fiscal year ended December 31,
1995 was mailed on or about April 9, 1996 to stockholders of record on March 22,
1996. The Annual Report does not constitute, and should not be considered, a
part of this proxy solicitation material, except as otherwise expressly
provided.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY SHAREHOLDER WHO SO
REQUESTS IN WRITING, A COPY OF THE COMPANY'S ANNUAL REPORT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1995, WITHOUT EXHIBITS. REQUESTS SHOULD BE DIRECTED TO ALAN W. FAIGIN, SECRETARY
OF THE COMPANY, AT 2020 SANTA MONICA BOULEVARD, 6TH FLOOR, SANTA MONICA, CA
90404.
1997 ANNUAL MEETING -- RECEIPT OF SHAREHOLDER PROPOSALS
Any shareholder proposal must be submitted in writing to the Secretary of
the Company at 2020 Santa Monica Boulevard, 6th Floor, Santa Monica, CA 90404,
and received by December 11, 1996 if it is to be considered for inclusion in the
Company's 1997 proxy materials.
OTHER MATTERS
The Board of Directors does not know of any matter to be presented for
consideration at the Annual Meeting which is not listed on the Notice of Annual
Meeting and discussed above. If any such other business should properly come
before the meeting, the shares represented at the meeting by the proxies and
voting instructions solicited hereby will be voted in accordance with the
judgment of the proxy holders.
By Order of the Board of Directors
/s/ ALAN W. FAIGIN
-----------------------------------
Alan W. Faigin, Secretary
Dated: April 9, 1996
20
<PAGE> 23
PROXY
[LOGO] FREMONT GENERAL CORPORATION
C/O CHEMICAL MELLON SHAREHOLDER SERVICES
P.O. Box 1515
New York, New York 10277-1515
Board of Directors Proxy
ANNUAL MEETING OF STOCKHOLDERS: May 9, 1996
John A. Donaldson and Raymond G. Meyers, or either of them, with full power of
substitution, are hereby appointed by the signatory of this Proxy to vote all
shares of Common Stock held by the signatory on March 22, 1996, at the Annual
Meeting of Stockholders of Fremont General Corporation, or any adjournment
thereof, on each of the items on the reverse side and in accordance with the
directions given there and, in their discretion, on all other matters that may
properly come before the Annual Meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED ON THE REVERSE SIDE OR IF NO
DIRECTION IS GIVEN WILL BE VOTED FOR ITEMS 1 AND 2.
(Continued, and to be dated and signed on reverse side)
- -------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE> 24
Please mark
your vote [X]
as this
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE MAY 9, 1996
ANNUAL MEETING OF STOCKHOLDERS OF FREMONT GENERAL CORPORATION
The Board of Directors recommends a vote FOR Items 1 and 2.
WITHHOLD
AUTHORITY
to vote for
FOR ALL nominees
Item 1: ELECTION OF DIRECTORS [ ] [ ]
Duly nominated: J. A. McIntyre
W. R. Bailey, H. I. Flournoy,
C. D. Kranwinkle, D. W. Morrisroe,
L. J. Rampino, D. C. Rosa
Withhold authority to vote for the following nominee(s)
_______________________________________________________
FOR AGAINST ABSTAIN
Item 2: To ratify the [ ] [ ] [ ]
appointment of
Ernst & Young LLP
as independent public
accountants.
_____
/ Please mark, date and sign as your name appears
/ to the left and return in the enclosed envelope.
/ If acting as executor, administrator, trustee or
guardian, you should so indicate when signing.
If the signer is a corporation, please sign the
full corporate name, by duly authorized officer.
If shares are held jointly, each stockholder
named should sign.
Dated: _________________________________________
Signature(s): __________________________________
__________________________________
see other side for important
information
- -------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
REVERSE SIDE
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THIS SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE
