<PAGE>
As filed with the Securities and Exchange Commission on June 29, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
COMMISSION FILE NO. 1-8007
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
FREMONT GENERAL CORPORATION
AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
FREMONT GENERAL CORPORATION
2020 SANTA MONICA BOULEVARD
SANTA MONICA, CALIFORNIA 90404
(310)315-5500
<PAGE>
REQUIRED INFORMATION
The Fremont General Corporation and Affiliated Companies Investment Incentive
Plan ("Plan") is subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of
Form 11-K, the financial statements and schedules of the Plan for the two fiscal
years ended December 31, 1997 and 1996, which have been prepared in accordance
with the financial reporting requirements of ERISA, are attached hereto and
incorporated herein by reference.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
FREMONT GENERAL CORPORATION
AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
June 29, 1998 By /s/ RAYMOND G. MEYERS
---------------------------
Raymond G. Meyers
on behalf of the Plan
Administrator of the
Fremont General Corporation
and Affiliated Companies
Investment Incentive Plan
<PAGE>
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
FREMONT GENERAL CORPORATION
AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
YEARS ENDED DECEMBER 31, 1997 AND 1996
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
YEARS ENDED DECEMBER 31, 1997 AND 1996
CONTENTS
Report of Independent Auditors.................................................1
Financial Statements
Statements of Net Assets Available for Benefits................................2
Statements of Changes in Net Assets Available for Benefits ....................3
Notes to Financial Statements..................................................4
Supplemental Schedules
Schedule of Assets Held for Investment Purposes...............................15
Schedule of Reportable Transactions ..........................................16
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Plan Administrator of the
Fremont General Corporation and
Affiliated Companies Investment Incentive Plan
We have audited the accompanying statements of net assets available for benefits
of the Fremont General Corporation and Affiliated Companies Investment Incentive
Plan as of December 31, 1997 and 1996, and the related statements of changes in
net assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes as of December 31, 1997, and schedule of
reportable transactions for the year then ended are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ERNST & YOUNG LLP
June 4, 1998
1
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Investments at fair value:
Merrill Lynch:
Growth Fund ................................................ $ 15,472,322 $ 11,358,801
Global Allocation Fund ..................................... 3,870,988 2,705,199
Corporate Bond Fund ........................................ 3,680,935 3,222,463
Capital Fund ............................................... 4,255,124 2,544,251
Basic Value Fund ........................................... 6,448,563 3,017,601
Retirement Preservation Fund ............................... 22,987,062 21,964,461
Fremont General Corporation Common Stock ..................... 52,948,672 31,154,799
Participants' loans .......................................... 3,722,589 2,936,028
------------ ------------
113,386,255 78,903,603
Receivables:
Interest and dividends ....................................... 21,876 165,556
Other assets .................................................... 464,953 -
------------ ------------
Net assets available for benefits ............................... $113,873,084 $ 79,069,159
============ ============
See accompanying notes.
</TABLE>
2
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996
------------ -------------
<S> <C> <C>
ADDITIONS
Contributions:
Employee ..................................................... $ 10,289,372 $ 6,489,512
Employer Companies ........................................... 3,965,615 2,913,891
Interest and dividends .......................................... 4,699,262 3,899,971
Net realized and unrealized appreciation
in fair value of investments ................................. 25,140,888 7,987,447
------------ ------------
44,095,137 21,290,821
DEDUCTIONS
Benefit distributions to participants ........................... 9,291,212 7,643,032
------------ ------------
Net increase .................................................... 34,803,925 13,647,789
Net assets available for benefits at beginning
of year ...................................................... 79,069,159 65,421,370
------------ ------------
Net assets available for benefits at end of year ................ $113,873,084 $ 79,069,159
============ ============
See accompanying notes.
</TABLE>
3
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. DESCRIPTION OF THE PLAN
The following description of the Fremont General Corporation and Affiliated
Companies (the Company) Investment Incentive Plan (the Plan) provides only
general information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions. In the case of any inconsistency
between this document and the Plan document, the Plan document shall control.
GENERAL
The Plan is a defined contribution 401(k) plan which commenced on February 1,
1986, and covers eligible employees of Fremont General Corporation and
affiliated companies (the Employer Companies). An eligible employee who is
employed by the Employer Companies may elect to make salary deferral 401(k)
contributions beginning the first full pay period in the month following
employment or as of any subsequent entry date.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
CONTRIBUTIONS
Eligible employees may contribute up to 15% of their pretax eligible
compensation. For the plan year beginning on January 1, 1997, Employer Companies
matched 75% of the first 6% of eligible compensation contributed by the
participant. For the plan year beginning on January 1, 1996, Employer Companies
matched 70% of the first 6% of eligible compensation contributed by the
participant. Officers participate in the Plan on the same basis as all other
employees. Each contributing Employer Company also may elect to make an
additional discretionary contribution. Discretionary employer contributions are
allocated to participants in proportion to their compensation.
4
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Employer Companies' contributions and (b) Plan earnings
or losses. Allocations are based on participants' eligible compensation or, in
the case of investment earnings or losses, account balances. Forfeited balances
of terminated participants' nonvested accounts are used to reduce the Employer
Companies' matching contributions for the year in which the forfeitures
occurred.
VESTING
Participants' salary deferral 401(k) contributions and allocated earnings or
losses thereon are 100% vested at all times. Company matching and discretionary
contributions vest pursuant to a graduated vesting schedule in increments based
on each full year of service. Participants become 100% vested in the event of
death, disability, upon attainment of normal retirement age, or upon termination
of the Plan.
INVESTMENT OPTIONS
The Plan trustee is Merrill Lynch Trust Company of California (ML). Participants
may direct their employer and employee contributions in any of the following six
ML investment options, and Fremont General Corporation Common Stock.
Merrill Lynch Growth Fund - Diversified portfolio of equity securities
(common stocks and to a lesser extent securities convertible into common
stocks)
Merrill Lynch Global Allocation Fund - Globally oriented portfolio of
equity, debt and money market securities
Merrill Lynch Corporate Bond Fund - Portfolio of primarily taxable fixed
income securities rated A or better
Merrill Lynch Capital Fund - Fully managed investment fund utilizing
equity, debt and convertible securities
5
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Merrill Lynch Basic Value Fund - Invests in stocks that are selling at a
discount from per share book value or from historic price-to-earnings
ratios, have dividend yields greater than the stock market average and/or
seem capable of recovering from situations that caused the companies to
become temporarily out of favor
Merrill Lynch Retirement Preservation Fund - Invests in broadly diversified
portfolio of Guaranteed Investment Contracts and in obligations of U.S.
government and U.S. government agency securities
Fremont General Corporation Common Stock - Single stock equity investment
as opposed to a diversified portfolio of securities
DISTRIBUTIONS
All distributions of vested account balances may be made to participants
following termination of employment, attainment of age 59 1/2, retirement from
the Company, total disability, or to the designated beneficiary following a
participant's death. In addition, participants may make withdrawals from their
account balances in the event of hardship. A hardship withdrawal can be made for
the following circumstances: expenses to avoid eviction or foreclosure of the
participant's principal residence, extraordinary medical expenses for the
participant or his or her dependents, tuition and related educational expenses
for post-secondary education for the following 12 months for the participant or
the participant's dependents, and costs relating to the purchase of a principal
residence for the participant.
PARTICIPANTS' LOANS
Participants may borrow from the vested portion of their account balance based
on the balance at the close of business of the prior day. Interest is fixed for
the term of the loan. An approved loan must be repaid fully within a minimum of
12 months to a maximum of 60 months. A transaction fee of $40 is required of
each participant upon loan approval.
6
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. DESCRIPTION OF THE PLAN (CONTINUED)
AMENDMENT AND/OR TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan at any time for any reason. In the event of termination, the
Plan document provides for full vesting of all participants. The Company also
reserves the right to amend the Plan at any time for any reason with or without
advance notice (unless required by law) in accordance with the procedures set
forth in the plan document.
2. SUMMARY OF ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
All assets of the Plan are held by ML at December 31, 1997 and 1996.
Investments are stated at current net asset value, which approximates fair
value. The Merrill Lynch funds' net asset values are determined by ML. Fremont
General Corporation Common Stock is stated at current market value as determined
by the Plan Administrator based on the closing price on the New York Stock
Exchange (NYSE). The closing price of Fremont General Corporation Common Stock
on December 31, 1997, was $54.75 per share.
INVESTMENT INCOME
Interest and dividend income is recorded on the accrual basis.
Realized investment gains and losses are determined using the
specific-identification basis.
INCOME TAX STATUS
The Internal Revenue Service has issued a determination letter dated October 19,
1995, that the Plan qualifies, in form, under Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986, as amended (the Code), and the underlying trust
is, therefore, exempt from federal income taxes under Section 501(a) of the
Code. The Plan is required to operate in accordance with the Code to maintain
its tax qualification. The Plan Administrator is not aware of any course of
actions or series of events that have occurred which would have a material
adverse affect on the Plan's qualified status.
7
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
EXPENSES
All administrative expenses of the Plan are paid by the Company. The Plan
utilizes office space provided by the Company for which it pays no rent.
BENEFIT PAYMENTS
Benefit distributions to Plan participants are recorded in the period in which
the distributions are paid. Distributions payable at December 31, 1997 and 1996,
are $255,209 and $313,199, respectively.
FORFEITURES
The balance of amounts forfeited by nonvested accounts at December 31, 1997, was
$1,143,590. These forfeitures will be used to reduce employer matching
contributions in the year in which the forfeitures occur.
3. INVESTMENT PROGRAMS
The Plan provides various investment vehicles (including participant loans) in
which participants may elect to have their accounts invested. A summary of the
1997 and 1996 statements of net assets available for benefits and statements of
changes in net assets available for benefits allocated to each of these vehicles
is as follows.
8
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT PROGRAMS (CONTINUED)
Net assets available for benefits at December 31, 1997:
<TABLE>
<CAPTION>
Merrill
Merrill Lynch Merrill Merrill
Lynch Global Lynch Lynch
Growth Allocation Corporate Capital
Fund Fund Bond Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investments at fair value ....... $ 15,472,322* $ 3,870,988 $ 3,680,935 $ 4,255,124
Interest and dividends
receivable ................... - - - -
------------ ----------- ----------- -----------
Net assets available for
benefits ..................... $ 15,472,322 $ 3,870,988 $ 3,680,935 $ 4,255,124
============ =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Merrill Merrill Fremont
Lynch Lynch General
Basic Retirement Corporation
Value Preservation Common Participants'
Fund Fund Stock Loans Other Total
------------ ------------ ----------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investments at fair value ....... $ 6,448,563* $ 22,987,062* $52,948,672* $ 3,722,589 $ 464,953 $113,851,208
Interest and dividends
receivable ................... - - 21,876 - - 21,876
------------ ----------- ----------- ----------- --------- ------------
Net assets available for
benefits ..................... $ 6,448,563 $ 22,987,062 $52,970,548 $ 3,722,589 $ 464,953 $113,873,084
============ ============ =========== =========== ========= ============
*Investments represent 5% or more of the net assets available for benefits at December 31, 1997.
</TABLE>
Net assets available for benefits at December 31, 1996:
<TABLE>
<CAPTION>
Merrill
Merrill Lynch Merrill Merrill
Lynch Global Lynch Lynch
Growth Allocation Corporate Capital
Fund Fund Bond Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investments at fair value ...... $ 11,358,801* $ 2,705,199 $ 3,222,463 $ 2,544,251
Interest and dividends
receivable .................. - - - -
------------ ----------- ----------- -----------
Net assets available for
benefits .................... $ 11,358,801 $ 2,705,199 $ 3,222,463 $ 2,544,251
============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Merrill Merrill Fremont
Lynch Lynch General
Basic Retirement Corporation
Value Preservation Common Participants'
Fund Fund Stock Loan Total
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments at fair value ...... $ 3,017,601 $21,964,461* $31,154,799* $ 2,936,028 $ 78,903,603
Interest and dividends
receivable .................. - - 165,556 - 165,556
----------- ----------- ----------- ----------- ------------
Net assets available for
benefits .................... $ 3,017,601 $21,964,461 $31,320,355 $ 2,936,028 $ 79,069,159
=========== =========== =========== =========== ============
*Investments represent 5% or more of the net assets available for benefits at December 31, 1996.
</TABLE>
9/10
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT PROGRAMS (CONTINUED)
Changes in net assets available for benefits for year ended December 31, 1997:
<TABLE>
<CAPTION>
Merrill Merrill
Merrill Lynch Lynch Merrill
Lynch Global Corporate Lynch
Growth Allocation Bond Capital
Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS
Contributions ..................... $ 3,319,112 $ 1,060,082 $ 747,882 $ 1,175,183
Interest and dividends ............ 1,260,375 486,950 239,495 323,864
Net realized and unrealized
appreciation (depreciation) in
fair value of investments ........ 850,180 (143,249) 49,870 290,098
----------- ----------- ----------- -----------
5,429,667 1,403,783 1,037,247 1,789,145
Interfund transfers ............... 421,925 28,159 (82,158) 77,397
DEDUCTIONS
Benefit distributions to
participants ..................... 1,738,071 266,153 496,617 155,669
Other ............................. - - - -
----------- ----------- ----------- ------------
Net increase ...................... 4,113,521 1,165,789 458,472 1,710,873
Net assets available for benefits
at beginning of year ............. 11,358,801 2,705,199 3,222,463 2,544,251
----------- ------------ ----------- ------------
Net assets available for benefits
at end of year ................... $15,472,322 $ 3,870,988 $ 3,680,935 $ 4,255,124
=========== =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
Merrill Merrill Fremont
Lynch Lynch General
Basic Retirement Corporation
Value Preservation Common Participants'
Fund Fund Stock Loans Other Total
----------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Contributions ..................... $ 1,732,184 $ 3,308,580 $ 2,911,964 $ - $ - $ 14,254,987
Interest and dividends ............ 450,522 1,392,703 545,353 - - 4,699,262
Net realized and unrealized
appreciation (depreciation) in
fair value of investments ........ 604,998 - 23,488,991 - - 25,140,888
----------- ----------- ----------- ------------ ----------- ------------
2,787,704 4,701,283 26,946,308 - - 44,095,137
Interfund transfers ............... 818,754 59,475 (1,323,552) - - -
DEDUCTIONS
Benefit distributions to
participants ..................... 175,496 3,738,157 3,972,563 (786,561) - 9,756,165
Other ............................. - - - - (464,953) (464,953)
----------- ----------- ----------- ------------- ----------- ------------
Net increase ...................... 3,430,962 1,022,601 21,650,193 786,561 464,953 34,803,925
Net assets available for benefits
at beginning of year ............. 3,017,601 21,964,461 31,320,355 2,936,028 - 79,069,159
----------- ------------ ----------- ------------- ----------- ------------
Net assets available for benefits
at end of year ................... $ 6,448,563 $22,987,062 $52,970,548 $ 3,722,589 $ 464,953 $113,873,084
=========== =========== =========== ============= =========== ============
</TABLE>
11/12
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT PROGRAMS (CONTINUED)
Changes in net assets available for benefits for year ended December 31, 1996:
<TABLE>
<CAPTION>
Merrill Merrill
Merrill Lynch Lynch Merrill
Lynch Global Corporate Lynch
Growth Allocation Bond Capital
Fund Fund Fund Fund
----------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
ADDITIONS
Contributions .................... $ 2,119,923 $ 649,831 $ 714,457 $ 926,383
Interest and dividends ........... 879,075 260,133 229,380 244,083
Net realized and unrealized
appreciation (depreciation) in
fair value of investments ....... 1,620,370 72,663 (157,718) 37,502
----------- ---------- ----------- ------------
4,619,368 982,627 786,119 1,207,968
Interfund transfers .............. 365,620 399,104 (516,401) 136,501
DEDUCTIONS
Benefit distributions to
participants .................... 967,621 338,349 375,984 381,933
----------- ---------- ----------- -------------
Net increase (decrease) .......... 4,017,367 1,043,382 (106,266) 962,536
Net assets available for benefits
at beginning of year ........... 7,341,434 1,661,817 3,328,729 1,581,715
----------- ---------- ----------- -------------
Net assets available for benefits
at end of year .................. $11,358,801 $2,705,199 $ 3,222,463 $ 2,544,251
=========== ========== =========== =============
</TABLE>
<TABLE>
<CAPTION>
Merrill Merrill Fremont
Lynch Lynch General
Basic Retirement Corporation
Value Preservation Common Participants'
Fund Fund Stock Loans Total
----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Contributions .................... $ 780,958 $ 1,872,985 $ 2,338,866 $ - $ 9,403,403
Interest and dividends ........... 201,602 1,405,895 679,803 - 3,899,971
Net realized and unrealized
appreciation (depreciation) in
fair value of investments ....... 207,744 - 6,206,886 - 7,987,447
----------- ----------- ----------- ------------ -----------
1,190,304 3,278,880 9,225,555 - 21,290,821
Interfund transfers .............. 398,688 (595,147) (188,365) - -
DEDUCTIONS
Benefit distributions to
participants .................... 283,575 4,305,992 1,470,490 (480,912) 7,643,032
----------- ----------- ----------- ------------- -----------
Net increase (decrease) .......... 1,305,417 (1,622,259) 7,566,700 480,912 13,647,789
Net assets available for benefits
at beginning of year ........... 1,712,184 23,586,720 23,753,655 2,455,116 65,421,370
----------- ----------- ----------- ------------- -----------
Net assets available for benefits
at end of year .................. $ 3,017,601 $21,964,461 $31,320,355 $ 2,936,028 $79,069,159
=========== =========== =========== ============= ===========
</TABLE>
13/14
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF CURRENT
LESSOR OR SIMILAR PARTY INVESTMENT COST VALUE
- ----------------------------------- ----------------- ------------ ------------
<S> <C> <C> <C>
Merrill Lynch*
Growth Fund 540,046 Units $ 13,235,182 $ 15,472,322
Global Allocation Fund 273,762 Units 3,986,343 3,870,988
Corporate Bond Fund 320,639 Units 3,648,782 3,680,935
Capital Fund 123,301 Units 3,931,761 4,255,124
Basic Value Fund 173,909 Units 5,660,681 6,448,563
Retirement Preservation Fund 22,987,061 Units 22,987,062 22,987,062
Fremont General Corporation* 967,099 shares 14,400,945 52,948,672
of common stock
Participants' loans Interest at market rates 3,722,589 3,722,589
------------ ------------
$ 71,573,345 $113,386,255
============ ============
*Indicates a party-in-interest to the Plan.
</TABLE>
15
<PAGE>
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
EXPENSES CURRENT VALUE
INCURRED OF ASSET ON
IDENTITY OF DESCRIPTION PURCHASE SELLING WITH COST OF TRANSACTION NET GAIN
PARTY INVOLVED OF ASSET PRICE PRICE TRANSACTION ASSET DATE (LOSS)
- -------------- ---------------- --------- ---------- ---------- ---------- ------------- ----------
CATEGORY (III) - A SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS.
<S> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch* Growth Fund $7,141,123 $ - $ - $7,141,123 $ 7,141,123 $ -
Merrill Lynch* Growth Fund - 3,507,063 - 2,905,392 2,905,392 601,671
Merrill Lynch* Retirement
Preservation
Fund 8,855,045 - - 8,855,045 8,855,045 -
Merrill Lynch* Retirement
Preservation
Fund - 7,829,316 - 7,829,316 7,829,316 -
Merrill Lynch* Basic Value Fund 3,879,430 - - 3,879,430 3,879,430 -
Merrill Lynch* Basic Value Fund - 1,000,247 - 886,142 886,142 114,105
Fremont General
Corporation* Common Stock 7,611,427 - - 7,611,427 7,611,427 -
Fremont General
Corporation* Common Stock - 6,716,521 - 4,177,460 4,177,460 2,539,061
There were no category (i), (ii) or (iv) reportable transactions during 1997.
*Indicates a party-in-interest to the Plan.
16
</TABLE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement Form
S-8 pertaining to the Investment Incentive Program of Fremont General
Corporation of our report dated June 4, 1998, with respect to the financial
statements and schedules of the Fremont General Corporation Investment Incentive
Program included in this Annual Report Form 11-K for the year ended December 31,
1997.
ERNST & YOUNG LLP
Los Angeles, California
June 29, 1998
