AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 9, 2007
--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NO. 001-08007
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
2425 OLYMPIC BOULEVARD - 3RD FLOOR EAST
SANTA MONICA, CALIFORNIA 90404
(310) 315-5500
EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form 11-K for the year ended
December 31, 2006 is being filed solely to correct a clerical error in the
footnotes to the financial statements. The balance of amounts forfeited by
nonvested accounts of inactive participants at December 31, 2006, originally
reported as $1,116,823, included forfeitures related to another plan. The
correct balance of amounts forfeited was $25,726 at December 31, 2006. This Form
11-K/A amends and replaces the original Form 11-K filing in its entirety. Except
for the foregoing, this Form 11-K/A does not modify or update other disclosures
as presented in the Form 11-K filed with the Securities and Exchange Commission
on June 29, 2007.
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FINANCIAL STATEMENTS
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, 2006 and 2005, which have been prepared in accordance
with the financial reporting requirements of ERISA, are attached hereto and
incorporated herein by reference.
EXHIBIT
NO. DESCRIPTION
--------- ------------------------------------------------------------------
23.1 Consent of Independent Registered Public Accounting Firm -
Armanino McKenna LLP
23.2 Consent of Independent Registered Public Accounting Firm -
Ernst & Young LLP
FREMONT GENERAL CORPORATION
AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 2006 AND 2005
TABLE OF CONTENTS
PAGE NO.
-------
Reports of Independent Registered Public Accounting Firm ........... 1a - 1b
Statements of Net Assets Available for Benefits .................... 2
Statements of Changes in Net Assets Available for Benefits ......... 3
Notes to Financial Statements ...................................... 4 - 10
Supplemental Schedules
Schedule of Assets (Held at End of Year) .................... 11
Schedule of Reportable Transactions ......................... 12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fremont General Corporation and
Affiliated Companies Investment Incentive Plan
Santa Monica, California
We have audited the financial statements of the Fremont General Corporation and
Affiliated Companies Investment Incentive Plan (the "Plan") as of December 31,
2006, and for the year then ended and the supplemental schedules, as listed in
the accompanying table of contents. These financial statements and supplemental
schedules are the responsibility of the Plan's administrator. Our responsibility
is to express an opinion on these financial statements and supplemental
schedules based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (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. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by the Plan's management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As discussed in Note 2, the Plan adopted the provisions of Financial Accounting
Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1 during the Plan
year ended December 31, 2006.
As discussed in Note 2 (Forfeitures), the Plan has corrected a clerical error in
the footnotes to its previously issued financial statements.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2006, and the changes in net assets available for benefits for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) as of December 31, 2006, and reportable transactions for
the year then ended, are presented for the purpose of additional analysis and is
not a required part of the basic 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 the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/S/ ARMANINO McKENNA LLP
San Ramon, California
August 7, 2007
1a
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fremont General Corporation
and Affiliated Companies Investment Incentive Plan
We have audited the accompanying statement of net assets available for benefits
of the Fremont General Corporation and Affiliated Companies Investment Incentive
Plan as of December 31, 2005, and the related statement of changes in net assets
available for benefits for the year 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 audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board 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. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides 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, 2005, and the changes in its net assets available for benefits for
the year then ended, in conformity with U.S. generally accepted accounting
principles.
/S/ ERNST & YOUNG LLP
Los Angeles, California
June 15, 2006
1b
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Statements of Net Assets Available for Benefits
December 31, 2006 and 2005
-----------------------------
2006 2005
------------- -------------
Investments, at fair value .................................................. $ 204,709,917 $ 206,872,010
Interest receivable ......................................................... 11,479 3,931
Other assets ................................................................ 127,248 125,613
------------- ------------
Net assets available for benefits at fair value ............................. 204,848,644 207,001,554
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts ................................... (506,137) (430,415)
------------- -------------
Net assets available for benefits ........................................... $ 204,342,507 $ 206,571,139
============= =============
The accompanying notes are an integral part of these financial statements.
-2-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2006 and 2005
-----------------------------
DECEMBER 31,
--------------------------------
2006 2005
------------ -------------
Additions to net assets available for benefits
Interest and dividend income .............................................. $ 11,844,340 $ 7,145,036
------------- -------------
Total interest and dividend income ...................................... 11,844,340 7,145,036
------------- -------------
Contributions
Employer .................................................................. 15,642,822 14,221,009
Participant ............................................................... 21,257,237 18,405,180
------------- -------------
Total contributions ..................................................... 36,900,059 32,626,189
------------- -------------
Total additions ......................................................... 48,744,399 39,771,225
------------- -------------
Deductions from net assets available for benefits
Net depreciation in fair value of investments ............................. (27,030,339) (9,972,868)
Benefits paid to participants ............................................. (23,942,692) (13,777,598)
------------- -------------
Total deductions ........................................................ (50,973,031) (23,750,466)
------------- -------------
Net increase (decrease) in net assets available for benefits ................ (2,228,632) 16,020,759
Net assets available for benefits, beginning of year ........................ 206,571,139 190,550,380
------------- -------------
Net assets available for benefits, end of year .............................. $ 204,342,507 $ 206,571,139
============= =============
The accompanying notes are an integral part of these financial statements.
-3-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
1. DESCRIPTION OF PLAN
The following description of the Fremont General Corporation and Affiliated
Companies 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 prevail.
GENERAL
The Plan is a defined contribution 401(k) plan that commenced on February 1,
1986, and covers eligible employees of Fremont General Corporation ("FGC") and
participating subsidiaries (collectively, the "Company"). An eligible employee
who is employed by the Company may elect to make salary deferral 401(k)
contributions as soon as administratively feasible following his or her
employment date.
CONTRIBUTIONS
Employees may elect to have up to 15% of their eligible compensation, as
defined, deferred and deposited with the plan trustee, which will invest the
money at the employee's discretion among a variety of investment funds,
including the Company's common stock. Employee contributions are matched by the
Company at a rate of one dollar for every dollar contributed up to 6% of
eligible compensation deferred by the employee. Eligible employees may also make
catch-up contributions permitted under the Internal Revenue Code (the "Code").
The Company may make additional contributions at its discretion. Company
contributions during 2006 and 2005 to eligible employee participants were in
shares of Company common stock. Employees have discretion to diversify out of
Company common stock after the Company's contribution has been allocated into
participants' accounts. All employee contributions are 100% vested. The 401(k)
Plan provides that for any participant who is an employee on or after January 1,
2003, the participant's interest in his or her matching contributions account is
100% vested. Active employees may receive a distribution from his or her account
after attaining age 59 1/2 or pursuant to a hardship. Otherwise, distribution
is available following a participant's retirement, termination of employment or
death. Shares of the Company's common stock held in the 401(k) Plan and
allocated to participants' accounts are voted by the 401(k) Plan's Trustee upon
instructions from the participants.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan earnings or losses.
Allocations are based on participants' contributions and eligible compensation
or, in the case of investment earnings or losses, account balances. Forfeited
balances of nonvested accounts are applied towards restoring reinstated
accounts, the Company's matching contributions in future periods, or
administrative expenses.
-4-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
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 became fully vested to participants that were active employees on
or after January 1, 2003. Different vesting rules may apply to participants who
terminated employment with the Company before January 1, 2003.
DISTRIBUTIONS
Distributions of account balances may be made to participants under the
following circumstances: termination of employment, attainment of age 59 1/2,
retirement, as required for minimum distribution or pursuant to court order, or,
to the designated beneficiary following a participant's death. Participants may
make withdrawals from their account balances in the event of hardship for the
following circumstances: expenses to avoid eviction or foreclosure of their
principal residence, extraordinary uninsured medical expenses for the
participants or their dependents, tuition and related educational expenses for
post-secondary education for the following 12 months for the participants or
their dependents, and costs relating to the purchase of a principal residence.
Effective January 1, 2006, the Plan was amended to add the following
circumstances for hardship withdrawals: burial or funeral expenses for certain
dependents and expenses for the repair of damage to participants' principal
residence. Participants may also take withdrawals from the portion of their
account attributable to rollovers.
PARTICIPANTS' LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance
based on the value at the close of business of the prior day, whichever is less.
The loans are secured by the balance in the participant's account and 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. Repayments are made ratably
though payroll deductions. A loan processing fee of $40 is deducted directly
from the paycheck in which the first loan repayment is made.
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. 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-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are presented on the accrual basis of
accounting.
RECLASSIFICATIONS
Certain reclassifications of prior year's amounts have been made to conform to
the current year's presentation.
USE OF ESTIMATES
The preparation of the Plan's financial statements requires management to make
estimates and assumptions that affect the reported amounts and balances in the
financial statements and accompanying notes. Actual results could differ from
those estimates.
As described in Financial Accounting Standards Board Staff Position, FSP AAG
INV-1 and SOP 94-4-1, Reporting of Fully benefit-Responsive Investment Contracts
Held by Certain Investment Companies Subject to the AICPA Investment Company
Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP),
investment contracts held by a defined-contribution plan are required to be
reported at fair value. However, contract value is the relevant measurement for
that portion of the net assets available for benefits of a defined contributions
plan attributable to full benefit-responsive investment contracts because
contact value is the amount participants would receive if they were to initiate
permitted transactions under the terms of the plan. As required by the FSP, the
Statement of Net Assets Available for Benefits presents the fair value of the
investment contracts as well as the adjustment of the full benefit-responsive
investment contracts from fair value to contract value. The Statement of Changes
in Net Assets Available for Benefits is prepared on a contract value basis.
VALUATION OF INVESTMENTS
All assets of the Plan are held in trust by Merrill Lynch Bank & Trust Company,
FSB ("Merrill Lynch"). Investments in mutual funds are stated at current net
asset value, which approximates fair value. The funds' net asset values are
determined by Merrill Lynch. FGC Common Stock is stated at current market value
based on the composite closing price as reported on the New York Stock Exchange.
The closing price of FGC Common Stock on December 31, 2006, was $16.21 per share
($23.23 per share at December 31, 2005). Participant loans and the Retirement
Preservation Fund are stated at cost, which approximates fair value.
INVESTMENT INCOME
Realized investment gains and losses are determined using the
specific-identification basis.
-6-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
INCOME TAX STATUS
The Plan received a determination letter from the Internal Revenue Service dated
January 8, 2002, stating that the Plan is qualified, in form, under Section
401(a) of the Code and, therefore, the related trust is exempt from taxation.
Once qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan was amended subsequent to receiving the
determination letter. The Plan Administrator believes that the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is
tax-exempt.
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 participants are recorded in the period in which the
distributions are paid. Distributions payable at December 31, 2006 and 2005 were
$533,192 and $150,769, respectively.
FORFEITURES
The balance of amounts forfeited by nonvested accounts of inactive participants
at December 31, 2006 was $25,726 ($47,214 in 2005). These forfeitures will be
applied towards employer matching contributions in future periods.
The December 31, 2006 forfeitures balance reported in the previous paragraph
contains a correction to previously issued financial statements. The originally
reported balance included amounts related to another plan of the Company.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of stocks,
bonds, fixed income securities, mutual funds, and other investment securities.
Investment securities are exposed to various risks, such as interest rate,
market, and credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in values
of investment securities will occur in the near term and that changes could
materially affect participants' account balances and the amounts reported in the
statement of net assets available for benefits.
-7-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
3. INVESTMENTS
During 2006 and 2005, the Plan's investments (including investments purchased,
sold as well as held during the year) appreciated (depreciated) in fair value as
follows:
YEAR ENDED DECEMBER 31,
--------------------------------
2006 2005
------------- ------------
FGC Common Stock ............................................................ $ (30,395,220) $ (9,751,103)
Mutual funds ................................................................ 3,364,881 (221,765)
------------- ------------
$ (27,030,339) $ (9,972,868)
============= ============
Investments that represent 5% or more of the fair value of the Plan's assets are
as follows:
DECEMBER 31,
---------------------------------------------------------------
PERCENT OF PERCENT OF
2006 TOTAL 2005 TOTAL
------------ ---------- ------------ ----------
FGC Common Stock ............................... $ 67,943,298 33.3% $ 98,922,288 47.9%
Mutual funds
Merrill Lynch Retirement Preservation Fund .... $ 27,660,858 13.3% $ 24,942,611 11.9%
BlackRock Basic Value Fund .................... $ 14,403,810 7.1% *
BlackRock Fundamental Growth Fund ............. $ 13,528,200 6.6% $ 12,356,260 6.0%
BlackRock S&P 500 Index Fund .................. $ 13,307,844 6.5% $ 10,332,508 5.0%
BlackRock Global Allocation Fund .............. $ 12,532,916 6.1% *
* The balance was less than 5% of the fair value of the Plan's assets.
The Plan offers the Merrill Lynch Retirement Preservation Fund, a fully
benefit-responsive investment contract, as an investment option to Plan
participants. As of December 31, 2006 and 2005, the Plan's participants had
$27,154,721 and $24,512,196, respectively, invested in this fund.
Contributions to this contract are maintained in a general account. The account
is credited with earnings on the underlying investments and charged for
participant withdrawals and administrative expenses. The contract is included in
the financial statements at fair value as reported to the Plan by Merrill Lynch.
Contract value represents contributions made under the contract, plus earnings,
less participant withdrawals and administrative expenses. Participants may
ordinarily direct the withdrawal or transfer of all, or a portion, of their
investment at contract value. The market value of this contract as of December
31, 2006 and 2005 was $27,660,858 and $24,942,611, respectively.
-8-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
3. INVESTMENTS (CONTINUED)
There are no reserves against contract value for credit risk. The average yield
and crediting interest rates were approximately 4.99% and 4.56% for 2006 and
2005, respectively. The crediting interest rate is determined on a monthly basis
by an actuarial formula, as designated by Merrill Lynch. Investment income from
this fund was $1,244,552 for 2006.
4. RELATED PARTY TRANSACTIONS
Certain Plan investments are units of mutual funds and common/collective trust
funds managed by Merrill Lynch, the trustee as defined by the Plan. In September
2006, Merrill Lynch and BlackRock, Inc. merged. Participants also have the
option to invest in FGC Common Stock. At the Company's discretion, the
investments in FGC common stock may be funded from the Company's employee
benefits trust that is also maintained with Merrill Lynch. These transactions
qualify as party-in-interest transactions.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following reconciles net assets available for benefits per the financial
statements to Form 5500 as filed with the Department of Labor:
DECEMBER 31,
--------------------------------
2006 2005
------------- -------------
Net assets available for benefits per the financial statements ............. $ 204,342,507 $ 206,571,139
Less benefit payable to participants ....................................... 533,192 150,769
------------- -------------
Net assets available for benefits per Form 5500 ............................ $ 203,809,315 $ 206,420,370
============= =============
Amounts payable to participants are reflected as net assets available for
benefits for financial statement purposes but are not included in net assets
available for benefits on the Form 5500.
-9-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Notes to Financial Statements
December 31, 2006 and 2005
-------------------------
6. SUBSEQUENT EVENTS
LEGAL PROCEEDINGS
In April through June of 2007, six complaints seeking class certification were
filed in the United States District Court for the Central District of California
against Fremont General Corporation ("the Company") and various officers,
directors and employees by participants in the Company's Investment Incentive
Plan (401(k) and Employee Stock Ownership Plan (collectively "the Plans")
alleging violations of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") in connection with Company stock held by the Plans. Management
expects that the six complaints will be consolidated into a single proceeding.
The litigation is still in its early stages and it is impossible to predict its
effect on the Plan's assets.
Subsequent to year end, the closing price of FGC Common Stock declined. On June
27, 2007, the closing price was $11.03 per share ($16.21 per share at December
31, 2006).
-10-
SUPPLEMENTAL SCHEDULES
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Schedule of Assets (Held at End of Year)
EIN: 95-2815260, Plan #003
December 31, 2006
-----------------------------
(c)
(b) DESCRIPTION OF INVESTMENT INCLUDING (d) (e)
IDENTITY OF ISSUE MATURITY DATE, RATE OF INTEREST, COST CURRENT
(a) BORROWER, LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE BASIS VALUE
----- --------------------------------------------- ----------------------------------- ----- -------------
* Merrill Lynch:
BlackRock Fundamental Growth Fund 679,468 Units ** $ 13,528,200
BlackRock Global Allocation Fund 688,244 Units ** 12,532,916
BlackRock Bond Fund 697,246 Units ** 8,025,306
BlackRock Balanced Capital Fund 223,619 Units ** 6,129,392
BlackRock Basic Value Fund 431,381 Units ** 14,403,810
BlackRock S&P 500 Index Fund 764,819 Units ** 13,307,844
BlackRock International Index Fund 673,509 Units ** 10,196,930
Merrill Lynch Retirement Preservation Fund 27,154,721 Units ** 27,660,858
BlackRock Value Opportunities Fund 403,429 Units ** 9,892,068
BlackRock Aurora Fund 354,196 Units ** 9,690,812
Oppenheimer Quest Balance Value Fund 335,112 Units ** 6,310,152
* Fremont General Corporation 4,191,444 shares
of common stock ** 67,943,298
* Participants' loans Interest at the prime
rate plus 2% ** 5,088,331
-------------
$ 204,709,917
=============
* Indicates a party-in-interest to the Plan.
** The cost of participant-directed investments is not required to be disclosed.
-11-
FREMONT GENERAL CORPORATION AND AFFILIATED COMPANIES
INVESTMENT INCENTIVE PLAN
Schedule of Reportable Transactions
EIN: 95-2815260 PLAN NUMBER: #003
Year Ended December 31, 2006
-----------------------------
CURRENT
EXPENSES VALUE OF
INCURRED ASSET ON
DESCRIPTION PURCHASE SELLING WITH COST OF TRANSACTION NET
IDENTITY OF PARTY INVOLVED OF ASSETS PRICE PRICE TRANSACTION ASSET DATE GAIN
--------------------------- ---------- ----------- ------------ ----------- ------------ ------------ -----------
CATEGORY (iii) - A SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Fremont General Corporation* Common Stock $ 17,736,645 $ - $ - $ 17,736,645 $ 17,736,645 $ -
Fremont General Corporation* Common Stock $ - $ 16,522,257 $ - $ 12,828,468 $ 16,522,257 $ 3,693,789
There were no category (i), (ii) or (iv) reportable transactions during 2006.
* Indicates a party-in-interest to the Plan.
-12-
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
August 8, 2007 /s/ RAYMOND G. MEYERS
-------------------------------------------
Raymond G. Meyers
on behalf of the Plan Administrator of the
Fremont General Corporation and Affiliated
Companies Investment Incentive Plan