<PAGE>
As filed with the Securities and Exchange Commission on June 27, 2000
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, 1999
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, 1999 and 1998, 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 27, 2000 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>
AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
Fremont General Corporation and Affiliated Companies Investment Incentive Plan
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Audited Financial Statements
and Supplemental Schedules
Years ended December 31, 1999 and 1998
Contents
Report of Independent Auditors.................................................1
Audited 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 at End of Year................10
Schedule of Reportable Transactions...........................................11
<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 Fremont General Corporation and Affiliated Companies Investment Incentive
Plan (the "Plan") as of December 31, 1999 and 1998, 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999, and
schedule of reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
May 26, 2000
1
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
December 31
1999 1998
------------- -------------
<S> <C> <C>
Assets
Investments, at fair value ..................................... $ 97,237,699 $ 113,283,936
Receivables:
Interest and dividends ...................................... 34,160 27,890
Other (liabilities) assets ..................................... (307,950) 5,352
------------- -------------
Net assets available for benefits .............................. $ 96,963,909 $ 113,317,178
============= =============
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
1999 1998
------------- ------------
<S> <C> <C>
Additions (deductions)
Contributions:
Employee .................................................... $ 17,684,531 $ 14,720,954
Employer Companies .......................................... 7,775,024 5,868,912
Interest and dividends ......................................... 5,441,717 4,256,638
Net realized and unrealized depreciation in
fair value of investments ................................... (36,424,186) (8,483,670)
Benefit distributions to participants .......................... (10,830,355) (16,918,740)
------------- -------------
Net decrease ................................................... (16,353,269) (555,906)
Net assets available for benefits at beginning of year ......... 113,317,178 113,873,084
------------- -------------
Net assets available for benefits at end of year ............... $ 96,963,909 $ 113,317,178
============= =============
See accompanying notes.
</TABLE>
3
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Notes to Financial Statements
December 31, 1999
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 ("FGC") 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.
Contributions
Eligible employees may contribute up to 15% of their pretax eligible
compensation. For the Plan year beginning on January 1, 1999, Employer Companies
matched 85% of the first 6% of eligible compensation contributed by the
participant. For the plan year beginning on January 1, 1998, Employer Companies
matched 80% 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. No discretionary
employer contributions were made in 1999 or 1998.
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 in future periods.
4
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
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.
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 issuance.
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.
5
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Notes to Financial Statements (continued)
2. Summary of Accounting Policies
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States 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.
Reclassification
Certain amounts from the prior year have been reclassified to conform to the
current year presentation.
Valuation of Investments
All assets of the Plan are held by Merrill Lynch Trust Company of California
("Merrill Lynch") at December 31, 1999 and 1998.
Investments are stated at current net asset value, which approximates fair
value. The Merrill Lynch funds' net asset values are determined by Merrill
Lynch. FGC 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 FGC Common Stock on December 31, 1999 was $7.375
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
6
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Notes to Financial Statements (continued)
2. Summary of Accounting Policies (continued)
Income Tax Status (continued)
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.
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, 1999 and 1998
are $102,467 and $88,929, respectively.
Forfeitures
The balance of amounts forfeited by nonvested accounts at December 31, 1999 was
$1,090,416. These forfeitures will be used to reduce employer matching
contributions in future periods.
3. Investments
During 1999 and 1998, the Plan's investments (including investments purchased,
sold as well as held during the year) appreciated (depreciated) in fair value as
determined by quoted market prices as follows:
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
------------- -------------
<S> <C> <C>
FGC Common Stock ............................................... $ (39,880,991) $ (4,061,856)
Merrill Lynch Funds ............................................ 3,456,805 (4,421,814)
------------- -------------
$ (36,424,186) $ (8,483,670)
============= =============
</TABLE>
7
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Notes to Financial Statements (continued)
3. Investments (continued)
Investments that represent 5% or more of the fair value of the Plan's assets are
as follows:
<TABLE>
<CAPTION>
December 31
1999 1998
------------- -------------
<S> <C> <C>
FGC Common Stock* .............................................. $ 22,705,632 $ 49,872,705
Merrill Lynch:
Retirement Preservation Fund ................................ 20,786,401 22,758,739
Growth Fund ................................................. 14,271,023 12,077,751
Basic Value Fund ............................................ 10,143,796 9,627,621
Capital Fund ................................................ 5,615,787 5,622,901
*Nonparticipant-directed
</TABLE>
4. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
<TABLE>
<CAPTION>
December 31
1999 1998
------------- -------------
<S> <C> <C>
FGC Common Stock $ 22,705,632 $ 49,872,705
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
------------- -------------
<S> <C> <C>
Change in net assets:
Contributions $ 8,398,299 $ 4,716,539
Interest and dividends 887,692 689,091
Net realized and unrealized depreciation in fair
value of investments (39,880,991) (4,061,856)
Net transfers from participant-directed investments
5,058,376 1,781,120
Benefit distributions to participants (1,632,449) (6,222,737)
------------- ------------
Total $ (27,169,073) $ (3,097,843)
============= ============
</TABLE>
8
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
Notes to Financial Statements (continued)
5. Related Party Transactions
Certain Plan investments are units of mutual funds and common/collective trust
funds managed by Merrill Lynch. Merrill Lynch is the trustee as defined by the
Plan. Participants also have the option to invest in FGC Common Stock. These
transactions qualify as party-in-interest transactions.
9
<PAGE>
Supplemental Schedules
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
EIN 95-2815260 Plan No. 003
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at
End of Year
December 31, 1999
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Description of Current
Lessor or Similar Party Investment Cost Value
-------------------------------- ------------------------ ------------ ------------
<S> <C> <C> <C>
Merrill Lynch*
Growth Fund 520,460 Units $ 11,176,520 $ 14,271,023
Global Allocation Fund 335,282 Units 4,469,326 4,700,648
Corporate Bond Fund 441,811 Units 5,064,304 4,709,700
Capital Fund 175,110 Units 6,024,353 5,615,787
Basic Value Fund 265,892 Units 10,299,062 10,143,796
S&P Index Fund 196,426 Units 3,272,293 3,539,596
International Index Fund 41,614 Units 551,048 629,619
Fundamental Growth Fund 139,690 Units 3,271,580 3,650,093
Quest Balance Fund 122,382 Units 1,990,682 1,932,404
Retirement Preservation Fund 20,786,401 Units 20,786,401 20,786,401
fremont General Corporation* 3,078,730 shares
of common stock 60,735,439 22,705,632
Participants' loans Interest at market rates - 4,553,000
-----------
$ 97,237,699
============
*Indicates a party-in-interest to the Plan.
</TABLE>
10
<PAGE>
Fremont General Corporation and Affiliated Companies
Investment Incentive Plan
EIN 95-2815260 Plan No. 003
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
Current Value
Expenses of Asset on
Description Purchase Selling Incurred with Cost of Transaction
Identity of Party Involved of Asset Price Price Transaction Asset Date Net Loss
---------------------------- ------------ ------------ ---------- ------------ ------------ ------------ ---------
<S> <S> <C> <C> <C> <C> <C> <C>
Category (iii) - A series of
transactions in excess of 5%
of Plan assets.
Fremont General Corporation* Common Stock $ 18,147,340 $ - $ - $ 18,147,340 $ 18,147,340 $ -
Fremont General Corporation* Common Stock - 4,038,908 - 4,382,131 4,038,908 (343,223)
There were no category (i), (ii) or (iv) reportable transactions during 1999.
*Indicates a party-in-interest to the Plan.
</TABLE>
11