Document:

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                                                                   EXHIBIT 10.11

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), which is made and entered
into effective as of February 25, 2000 (the "Effective Date"), by and between
Wayne R. Bailey (the "Executive") and Fremont General Corporation (the
"Company"), amends and supercedes that Employment Agreement entered into
February 8, 1996 (the "Effective Date") and extended as of February 8, 1999 (the
"Extension Date").

                                 R E C I T A L S

         A. The Company and the Executive desire to enter into this Agreement in
order to provide additional financial security and benefits to the Executive in
recognition of past services and to encourage Executive to continue employment
with the Company.

         B. To accomplish the foregoing objectives, the Board of Directors of
the Company (the "Board") has directed the Company, upon execution of this
Agreement by the Executive, to agree to the terms provided herein.

         C. Certain capitalized terms used in the Agreement are defined in
Section 7 below.

         In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Executive by the Company, the
parties agree as follows:

         1. Duties and Scope of Employment.

                  (a) Position. The Company shall employ the Executive in the
position of Executive Vice President and Chief Financial Officer, with such
duties, responsibilities and compensation as in effect as of the Effective Date;
provided, however, that the Board shall have the right to revise such
responsibilities and compensation from time to time as the Board may deem
necessary or appropriate. If any such revision constitutes "Involuntary
Termination" (as defined in Section 7(d)), the Executive shall be entitled to
benefits upon such Involuntary Termination as provided under this Agreement.

                  (b) Obligations. The Executive shall devote his full business
efforts and time to the Company and its subsidiaries. The foregoing, however,
shall not preclude the Executive from engaging in such activities and services
as do not interfere or conflict with his responsibilities to the Company.

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         2. Employment Period. The "Employment Period" commenced as of February
8, 1996 (the "Effective Date") and was automatically extended pursuant to the
terms of the Agreement on February 8, 1999 (the "Extension Date"). Commencing
February 25, 2000, the term of this Agreement is a rolling thirty-six (36)
months, such that on each day of employment, the Executive has thirty-six (36)
months remaining on this employment contract. Either party may terminate this
Agreement by giving written notice to the other party. In the event notice of
termination of this Agreement is given by the Company such notice shall
constitute Involuntary Termination and the provisions of Section 4 shall apply.

         3. Compensation and Benefits.

                  (a) Base Compensation. The Company shall pay the Executive as
compensation for services a base salary as of the effective date at the
annualized rate of $600,000. Such salary shall be reviewed at least annually and
may be increased from time to time. Such salary may be decreased, subject to the
provisions of subsection 7(e)(ii) of this Agreement. Such salary shall be paid
periodically in accordance with normal Company payroll. The annual compensation
specified in this Section 3(a), as adjusted from time to time, is referred to in
this Agreement as "Base Compensation".

                  (b) Bonus. Beginning with the Company's current fiscal year
and for each fiscal year thereafter during the term of this Agreement, the
Executive shall be eligible to participate in any bonus plan or arrangement
maintained by the Company of general applicability to other key executives of
the Company.

                  (c) Executive Benefits. The Executive shall be eligible to
participate in the employee benefit plans and executive compensation programs
maintained by the Company of general applicability to other key executives of
the Company, including (without limitation) retirement plans, savings or
profit-sharing plans, deferred compensation plans, supplemental retirement or
excess-benefit plans, stock option, restricted stock programs, incentive or
other bonus plans, life, disability, health, accident and other insurance
programs, paid vacations, and similar plans or programs, subject in each case to
the generally applicable terms and conditions of the plan or program in question
and to the determination of the Board or any committee administering such plan
or program.

         4. Benefits Upon Termination.

                  (a) If the Executive's employment terminates, the Executive
shall be entitled to benefits as follows:

        (i) Involuntary Termination; Disability; Death. If the Executive's
employment terminates as a result of Involuntary Termination other than for
"Cause" or if the Executive's employment terminates as the result of Disability
or Death, then the Company shall pay the Executive (or the Executive's
beneficiary or representative) within

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ten (10) business days after the Termination Date, a lump sum amount equal to
Thirty Six (36) months' Base Compensation of the Executive at the time of such
Termination. In addition, the Executive shall be entitled to the payment of an
amount equal to the "Target" bonus amount of any bonus plan(s) then in effect of
which the Executive is a participant. Such payment shall likewise be made within
ten (10) business days of the Termination Date.

                  (ii) Voluntary Resignation; Termination for Cause. If the
Executive's employment terminates by reason of the Executive's voluntary
resignation, (and is not an Involuntary Termination), or if the Executive is
terminated for Cause, then the Executive shall not be entitled to receive
severance or other benefits except for those (if any) as may then be established
(and applicable) under the Company's then-existing severance and benefits plans
and policies at the time of such termination.

              (b) Benefits; Miscellaneous. In the event the Executive is
entitled to benefits pursuant to subsection 4 (a)(i) (other than as a result of
the Executive's death), then in addition to such benefits, the Company shall
continue to provide the Executive, for thirty-six (36) months after the
Termination Date, welfare benefits or such comparable alternative welfare
benefits as the Company may, in its discretion, determine to be sufficient to
satisfy its obligations to the Executive under this Agreement (including,
without limitation, medical, prescription, dental, disability, individual life,
group life, accidental death and travel accident plans and programs) which are
at least as favorable as the most favorable plans of the Company applicable to
other peer executives and their families as of the Termination Date
Notwithstanding the foregoing, if the Executive is covered under any medical,
life, or disability insurance plan(s) provided by a subsequent employer, then
the amount of coverage required to be provided by the Company hereunder shall be
reduced by the amount of coverage provided by the subsequent employer's medical,
life or disability insurance plan(s). The Executive's rights under this Section
4(b) shall be in addition to, and not in lieu of, any continuation coverage or
conversion rights the Executive may have pursuant to applicable law, including
without limitation, continuation coverage required by Section 4980B of the
Internal Revenue Code.

              (c) In addition, (i) the Company shall pay the Executive any
unpaid base salary due for periods prior to the Termination Date; (ii) the
Company shall pay the Executive all of the Executive's accrued and unused
vacation through the Termination Date; and (iii) following submission of proper
expense reports by the Executive, the Company shall reimburse the Executive for
all expenses reasonably and necessarily incurred by the Executive in connection
with the business of the Company prior to termination. These payments shall be
made promptly upon termination and within the period of time mandated by law.

              (d) Option and Restricted Stock Accelerated Vesting. In the event
the Executive is entitled to severance benefits pursuant to subsection 4(a)(i),
the unvested portion of any stock option or restricted stock held by, or for the
benefit of, the Executive

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shall automatically be accelerated in full so as to become completely vested
and/or unrestricted.

                  (e) Option Bonus. In the event the Executive is entitled to
benefits pursuant to Section 4 (a)(i), then, in addition to the benefits
provided above, the Company shall also pay the Executive a cash bonus in an
amount equal to the aggregate option exercise price attributable to the
Executive's then outstanding Company stock options. Such bonus shall be paid in
a lump sum within ten (10) business days after the Termination Date.

                  (f) There shall be no duplication of the benefits provided for
under Paragraphs 4 and 5 of this Agreement. The benefits provided for under this
Paragraph 4 are not payable in the event the benefits under Paragraph 5 below
have been paid; conversely, the benefits under Paragraph 5 below shall not be
payable in the event the benefits hereunder have been paid.

        5. Benefits Upon A Company Event. Upon the occurrence of a Company Event
(as defined), the Company shall pay to the Executive within ten (10) business
days thereof the following benefits:

                  (a) A lump sum amount equal to thirty-six (36) months of the
Base Compensation of the Executive at the time of the Company Event;

                  (b) In addition, a lump sum amount equal to the "Target Bonus"
amount of any bonus plan then in effect in which the Executive is a participant;

                  (c) In addition, the continuation of all benefits described in
Section 4(b) above; shall continue for thirty-six (36) months.

                  (d) In addition, the unrestricted portion of any stock option
or restricted stock held by or for the benefit of the Executive shall
automatically be accelerated in full so as to become fully vested and/or
unrestricted.

                  (e) Further, the Option Bonus provided for in Paragraph 4(d)
shall likewise be paid by the Company within ten (10) business days of the
Company Event.

                  (f) There shall be no duplication of the benefits provided for
under Paragraphs 4 and 5 of this Agreement. The benefits provided for under this
Paragraph 5 are not payable in the event the benefits under Paragraph 4 above
have been paid; conversely, the benefits under Paragraph 4 above shall not be
payable in the event the benefits under this Paragraph 5 have been paid.

        6. Limitation on Payments. Notwithstanding anything to the contrary
contained herein, in the event it shall be determined that any payment by the
Company to or for the benefit of the Executive, whether paid or payable but
determined without regard to any additional payments required under this Section
6 (a "Payment), would be

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subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any comparable federal, state, or local
excise tax (such excise tax, together with any interest and penalties, are
hereinafter collectively referred to as the "Excise Tax", then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in
such an amount that after the payment of all taxes (including, without
limitation, any interest and penalties on such taxes and the Excise Tax) on the
payment and on the Gross-Up Payment, the Executive shall retain an amount equal
to the Payment minus all applicable taxes on the Payment. The intent of the
parties is that the Company shall be solely responsible for, and shall pay, any
Excise Tax on the Payment and Gross-Up Payment and any income and employment
taxes (including, without limitation, penalties and interest) imposed on any
Gross-Up Payment, as well as any loss of tax deduction caused by the Gross-Up
Payment. All determinations required to be made under this Section, including
without limitation, whether and when a Gross-Up Payment is required in the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determinations, shall be made by a nationally recognized accounting firm
that is the Company's outside auditor at the time of such determinations, which
firm must be reasonably acceptable to the Executive (the "Accounting Firm"). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.

        7. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:

                  (a) Cause. "Cause" shall mean (i) a willful act of personal
dishonesty knowingly taken by the Executive in connection with his
responsibilities as an employee and intended to result in his substantial
personal enrichment, (ii) a willful and knowing act by the Executive which
constitutes gross misconduct, or any refusal by the Executive to comply with a
reasonable directive of the Board, (iii) a willful breach by the Executive of a
material provision of this Agreement, or (iv) a material and willful violation
of a federal or state law or regulation applicable to the business of the
Company. No act, or failure to act, by the Executive shall be considered
"willful" unless (1) committed without good faith and without a reasonable
belief that the act or omission was in the Company's best interest; and (2) the
Executive has been given notice of the offending conduct and given a reasonable
opportunity to cure, if possible. Termination for Cause shall not be deemed to
have occurred unless, by the affirmative vote of all of the members of the Board
(excluding the Executive, if applicable), at a meeting called and held for that
purpose (after reasonable notice to the Executive and his counsel after allowing
the Executive and his counsel to be heard before the Board, a resolution is
adopted finding that in the good faith opinion of such Board members the
Executive was guilty of conduct set forth in (i), (ii), (iii), or (iv) and
specifying the particulars thereof.

                  (b) Company Event. "Company Event" shall mean the occurrence
of any of the following events:

                      (i) Any "person" or "group" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, but

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excluding any acquisition by any employee benefit plan or benefit plan trust
sponsored by or maintained by the Company, and excluding any acquisition
directly by the Company, of securities of the Company representing 30% or more
of the total voting power represented by the Company's then outstanding voting
securities; or

                         (ii) A change in the composition of the Board of the
Company occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors" shall
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board of the
Company with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors of the Company);
or

                         (iii) The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets (other than to a subsidiary or subsidiaries); or

                         (iv) James A. McIntyre, while serving as Chairman of
the Board, has a conservator of his person appointed or dies.

                  (c) Disability. "Disability" shall mean that the Executive has
been or will be unable to perform his duties under this Agreement for a period
of six or more months due to illness, accident or other physical or mental
incapacity.

                  (d) Involuntary Termination. "Involuntary Termination" shall
mean:

                         (i) The continued assignment to Executive of any duties
or the continued significant change in the Executive's duties, either of which
is substantially inconsistent with the Executive's duties immediately prior to
such assignment or change for a period of 30 days after notice thereof from
Executive to the Chief Executive Officer of the Company or the Board setting
forth in reasonable detail the respects in which Executive believes such
assignments or duties are significantly inconsistent with the Executive's prior
duties;

                         (ii) a reduction in Executive's Base Compensation,
other than any such reduction which is part of, and generally consistent with, a
general reduction of officer salaries, except that in no event shall the
Executive's Base Compensation be reduced below the rate set forth in Section
3(a) above as of the Effective Date;

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                         (iii) a material reduction by the Company in the kind
or level of employee benefits (other than salary and bonus) to which Executive
is entitled immediately prior to such reduction with the result that Executive's
overall benefits package (other than salary and bonus) is substantially reduced
(other than any such reduction applicable to officers of the Company generally);

                         (iv) the relocation of Executive's principal place for
the rendering of the services to be provided by him hereunder to a location more
than fifty (50) miles from the present location of the principal executive
office of the Company;

                         (v) any purported termination of the Executive's
employment by the Company other than for Cause;

                         (vi) the failure of the Company to obtain the
assumption of this Agreement by any successors contemplated in Section 8 below;
or

                         (vii) any material breach by the Company of any
material provision of this Agreement which continues uncured for 30 days
following notice thereof; provided that none of the foregoing shall constitute
Involuntary Termination to the extent Executive has agreed thereto

                         (viii) any notice by the Company to the Executive that
this Agreement shall be terminated.

                  (e) Termination Date. "Termination Date: shall mean (i) if the
Executive's employment is terminated by the Company for Disability, thirty (30)
days after notice of termination is given to the Executive (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such thirty (30) day period), (ii) if the
Executive's employment or this Agreement is terminated by the Company for any
reason, the date on which a notice of termination is given, or (iii) if the
Agreement is terminated by the Executive, the date on which the Executive
delivers the notice of termination to the Company.

        8. Successors.

                  (a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.

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                (b) Executive's Successors. The terms of this Agreement and all
rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

        9. Notice.

                (a) General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the
Executive, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.

                (b) Notice of Termination. Any termination by the Company for
Cause or by the Executive as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice or termination to the
other party hereto given in accordance with Section 9 of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than 30 days after
the giving of such notice). The failure by the Executive to include in the
notice any fact or circumstance which contributes to a showing of Involuntary
Termination shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.

        10. Arbitration. At the option of either party, any and all disputes or
controversies whether of law or fact and of any nature whatsoever arising from
or respecting this Agreement shall be decided by arbitration by the American
Arbitration Association in accordance with the rules and regulations of that
Association.

                  The arbitrator shall be selected as follows: In the event the
Company and the Executive agree on one arbitrator, the arbitration shall be
conducted by such arbitrator. In the event the Company and the Executive do not
agree, the Company and the Executive shall each select one independent,
qualified arbitrator and the two arbitrators so selected shall select the third
arbitrator. The Company reserves the right to object to any individual
arbitrator who shall be employed by or affiliated with a competing organization.

                  Arbitration shall take place in Los Angeles, California, or
any other location mutually agreeable to the parties. At the request of either
party, arbitration proceedings will be conducted in the utmost secrecy; in such
case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or the Executive and

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their respective attorneys and their respective experts who shall agree in
advance and in writing to receive all such information confidentially and to
maintain such information in secrecy until such information shall become
generally known. The arbitrator, who shall act by majority vote, shall be able
to decree any and all relief of an equitable nature, including but not limited
to such relief as a temporary restraining order, a temporary and/or a permanent
injunction, and shall also be able to award damages, with or without an
accounting and costs, provided that punitive damages shall not be awarded. The
decree of judgment of an award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.

         Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or those authorized representatives shall have the right to
attend and/or participate in all the arbitration hearings in such manner as the
law shall require.

        11. Miscellaneous Provisions.

              (a) No Duty to Mitigate. The Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Executive may receive from any
other source.

              (b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

              (c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.

              (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.

              (e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

              (f) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be
void.

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              (g) Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

              (h) Assignment by Company. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of assignment. In the case of
any such assignment, the term "Company" when used in a section of this Agreement
shall mean the corporation that actually employs the Executive.

              (i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

                      IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.

COMPANY                            FREMONT GENERAL CORPORATION

                                   ---------------------------------------------
                                   By:  James A. McIntyre
                                   Title:  Chairman of the Board and Chief
                                           Executive Officer

EXECUTIVE                          WAYNE R. BAILEY

                                   ---------------------------------------------<PAGE>   1
                                                                   EXHIBIT 10.20

                         MANAGEMENT CONTINUITY AGREEMENT

         This Management Continuity Agreement (the "Agreement") is made and
entered into effective as of May 15, 2000 (the "Effective Date"), by and among
William B. (Brian) O'Hara (the "Executive"), Fremont General Corporation
("Fremont"), and Fremont Compensation Insurance Group, a wholly-owned subsidiary
of Fremont ("FCIG" and collectively with Fremont the "Company").

                                 R E C I T A L S

         A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other significant Company
event. The Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities. The Board is determined that
it is in the best interests of the Company and its stockholders to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Company Event (as
defined below).

         B. The Board believes that it is in the best interests of the Company
and its stockholders to provide the Executive with an incentive to continue his
employment and to motivate the Executive to maximize the value of the Company
upon a Company Event for the benefit of its stockholders.

         C. The Board believes that it is imperative to provide the Executive
with certain benefits upon a Company Event and, under certain circumstances,
upon termination of the Executive's employment in connection with a Company
Event, which benefits are intended to provide the Executive with financial
security and provide sufficient incentive and encouragement to the Executive to
remain with the Company notwithstanding the possibility of a Company Event.

         D. To accomplish the foregoing objectives, the Board has directed the
Company, upon execution of this Agreement by the Executive, to agree to the
terms provided herein.

         E. Certain capitalized terms used in the Agreement are defined in
Section 8 below.

         In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Executive by the Company, the
parties agree as follows:

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         1. Duties and Scope of Employment.

                  (a) Position. The Company shall employ the Executive in the
position of President and Chief Executive Officer of FCIG, with such duties,
responsibilities and compensation as in effect as of the Effective Date;
provided, however, that the Board shall have the right, at any time prior to the
occurrence of a Company Event, to revise such responsibilities and compensation
from time to time as the Board, it its discretion, may deem necessary or
appropriate.

                  (b) Obligations. The Executive shall continue to devote his
full business efforts and time to the Company and its subsidiaries. The
Executive shall comply with and be bound by the Company's operating policies,
procedures and practices from time to time in effect during his employment.
During the term of the Executive's employment with the Company, the Executive
shall devote his full time, skill and attention to his duties and
responsibilities, and shall perform them faithfully, diligently and competently,
and the Executive shall use his best efforts to further the business of the
Company and its affiliated entities. The foregoing, however, shall not preclude
the Executive from engaging in such activities and services as do not interfere
or conflict with his responsibilities to the Company.

         2. At-Will Employment. The Company and the Executive acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable law. If the Executive's employment terminates for any reason, the
Executive shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
practices or other agreements with the Company at the time of termination.

         3. Term of Agreement. The terms of this Agreement shall terminate upon
the earliest of (i) the date that all obligations of the parties hereunder have
been satisfied, (ii) in the absence of a Company Event (as defined in Section 8
(b)) prior to the third anniversary of the Effective Date, the third anniversary
of the Effective Date; or (iii) in the event of a Company Event on or prior to
the third anniversary of the Effective Date, the third anniversary of such
Company Event. Notwithstanding the foregoing, this Agreement may be extended for
an additional period or periods (the "Extension Period") by mutual written
agreement of the Company and the Executive. A termination of the terms of this
Agreement pursuant to this Section 3 shall be effective for all purposes, except
that such termination shall not affect the payment or provision of compensation
or benefits on account of a termination of employment occurring prior to the
termination of the terms of this Agreement.

<PAGE>   3

         4. Compensation and Benefits.

                  (a) Base Compensation. The Company shall pay the Executive as
compensation for services a base salary at the annualized rate of $400,000. Such
salary shall be reviewed at least annually and may be increased from time to
time. At any time prior to a Company Event, such salary may be decreased,
subject to the provisions of subsection 8(d)(ii) of this Agreement. Such salary
shall be paid periodically in accordance with normal Company payroll. The annual
compensation specified in this Section 4(a), as adjusted from time to time, is
referred to in this Agreement as "Base Compensation".

                  (b) Bonus. Beginning with the Company's current fiscal year
and for each fiscal year thereafter during the term of this Agreement, the
Executive shall be eligible to participate in any bonus plan or arrangement
maintained by the Company of general applicability to other key executives of
the Company.

                  (c) Executive Benefits. The Executive shall be eligible to
participate in the employee benefit plans and executive compensation programs
maintained by the Company of general applicability to other key executives of
the Company, including (without limitation) retirement plans, savings or
profit-sharing plans, deferred compensation plans, supplemental retirement or
excess-benefit plans, stock option, restricted stock programs, incentive or
other bonus plans, life, disability, health, accident and other insurance
programs, paid vacations, and similar plans or programs, subject in each case to
the generally applicable terms and conditions of the plan or program in question
and to the determination of the Board or any committee administering such plan
or program.

         5. Benefits Upon a Company Event. In the event of a Company Event that
occurs while the Executive is employed by the Company, the unvested portion of
any stock option or restricted stock held by the Executive shall automatically
be accelerated in full so as to become completely vested.

         6. Severance Benefits.

                  (a) Severance Benefits. If the Executive's employment with the
Company terminates either within the six (6) month period immediately prior to a
Company Event, or within thirty-six (36) months following a Company Event, then
the Executive shall be entitled to receive severance benefits, offset by
severance compensation and benefits already paid (if any), as follows:

                         (i) Involuntary Termination; Death; Disability. If the
Executive's employment terminates as a result of Involuntary Termination other
than for Cause or if the Executive's employment terminates as the result of the
Executive's Death or Disability, then the Company shall pay the Executive (or
the Executive's beneficiary or representative, as applicable) within ten (10)
business days after the Termination Date, a lump sum amount equal to thirty six
(36) months' Base Compensation of the Executive at

<PAGE>   4

the time of such Termination (without giving effect to any reduction in Base
Compensation that resulted in such Involuntary Termination). In addition, the
Executive shall be entitled to a payment of the "Target Bonus" Amount (as such
term is defined and applied by the Company) for the then current bonus period(s)
under any bonus plan(s) maintained by the Company in which the Executive is
participating on the Termination Date. Such payment shall be paid in a lump sum
within ten (10) business days after the Termination Date..

                         (ii) Voluntary Resignation; Termination for Cause. If
the Executive's employment terminates by reason of the Executive's voluntary
resignation, (and is not an Involuntary Termination), or if the Executive is
terminated for Cause, then the Executive shall not be entitled to receive
severance or other benefits except for those (if any) as may then be established
(and applicable) under the Company's then-existing severance and benefits plans
and policies at the time of such termination.

                  (b) Benefits; Miscellaneous. In the event the Executive is
entitled to severance benefits pursuant to subsection 6 (a)(i) (other than as a
result of the Executive's death), then in addition to such benefits, the Company
shall continue to provide the Executive, for thirty-six (36) months after the
Termination Date, welfare benefits or such comparable alternative welfare
benefits as the Company may, in its discretion, determine to be sufficient to
satisfy its obligations to the Executive under this Agreement (including,
without limitation, medical, prescription, dental, disability, individual life,
group life, accidental death and travel accident plans and programs) which are
at least as favorable as the most favorable plans of the Company applicable to
other peer executives and their families as of the Termination Date.
Notwithstanding the foregoing, if the Executive is covered under any medical,
life, or disability insurance plan(s) provided by a subsequent employer, then
the amount of coverage required to be provided by the Company hereunder shall be
reduced by the amount of coverage provided by the subsequent employer's medical,
life or disability insurance plan(s). The Executive's rights under this Section
6(b) shall be in addition to, and not in lieu of, any post-termination
continuation coverage or conversion rights the Executive may have pursuant to
applicable law, including without limitation, continuation coverage required by
Section 4980B of the Internal Revenue Code.

                  (c) In addition, (i) the Company shall pay the Executive any
unpaid base salary due for periods prior to the Termination Date; (ii) the
Company shall pay the Executive all of the Executive's accrued and unused
vacation through the Termination Date; and (iii) following submission of proper
expense reports by the Executive, the Company shall reimburse the Executive for
all expenses reasonably and necessarily incurred by the Executive in connection
with the business of the Company prior to termination. These payments shall be
made promptly upon termination and within the period of time mandated by law.

<PAGE>   5

         7. Limitation on Payments. Notwithstanding anything to the contrary
contained herein, in the event it shall be determined that any payment by the
Company to or for the benefit of the Executive, whether paid or payable but
determined without regard to any additional payments required under this Section
7 (a "Payment), would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), or any comparable
federal, state, or local excise tax (such excise tax, together with any interest
and penalties, are hereinafter collectively referred to as the "Excise Tax",
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in such an amount that after the payment of all taxes
(including, without limitation, any interest and penalties on such taxes and the
Excise Tax) on the payment and on the Gross-Up Payment, the Executive shall
retain an amount equal to the Payment minus all applicable taxes on the Payment.
The intent of the parties is that the Company shall be solely responsible for,
and shall pay, any Excise Tax on the Payment and Gross-Up Payment and any income
and employment taxes (including, without limitation, penalties and interest)
imposed on any Gross-Up Payment, as well as any loss of tax deduction caused by
the Gross-Up Payment. All determinations required to be made under this Section,
including without limitation, whether and when a Gross-Up Payment is required in
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determinations, shall be made by a nationally recognized
accounting firm that is the Company's outside auditor at the time of such
determinations, which firm must be reasonably acceptable to the Executive (the
"Accounting Firm"). All fees and expenses of the Accounting Firm shall be borne
solely by the Company.

         8. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:

                  (a) Cause. "Cause" shall mean (i) a willful act of personal
dishonesty knowingly taken by the Executive in connection with his
responsibilities as an employee and intended to result in his substantial
personal enrichment, (ii) a willful and knowing act by the Executive which
constitutes gross misconduct, or any refusal by the Executive to comply with a
reasonable directive of the Board, (iii) a willful breach by the Executive of a
material provision of this Agreement, or (iv) a material and willful violation
of a federal or state law or regulation applicable to the business of the
Company. No act, or failure to act, by the Executive shall be considered
"willful" unless (1) committed without good faith and without a reasonable
belief that the act or omission was in the Company's best interests; and (2) the
Executive has been given notice of the offending conduct and has been given a
reasonable opportunity to cure, if possible. Termination for Cause shall not be
deemed to have occurred unless, by the affirmative vote of all of the members of
the Board (excluding the Executive, if applicable), at a meeting called and held
for that purpose (after reasonable notice to the Executive and his counsel and
after allowing the Executive and his counsel to be heard before the Board), a
resolution is adopted finding that in the good faith opinion of such Board
members the Executive was guilty of conduct set forth in (i), (ii), (iii), or
(iv) and specifying the particulars thereof.

<PAGE>   6

                  (b) Company Event. "Company Event" shall mean the occurrence
of any of the following events:

                         (i) Any "person" or "group" (as such term is used in
Sections 13(d) and 14(d) of The Securities Exchange Act of 1934, as amended) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the total voting power represented by the Company's then
outstanding voting securities; or

                         (ii) The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets (other than to a subsidiary or subsidiaries); or

                         (iii) Any "person" or "group" other than Fremont or any
affiliate of Fremont (or any employee benefit plan or trust of either), directly
or indirectly acquires or controls, after the date hereof, more than fifty
percent (50%) of the voting securities or assets of FCIG in a transaction or
series of transactions.

                         (iv) Executive ceases to be an active executive
employee of Fremont as a result of any transaction between Fremont and any third
party and/or any of the events described under subparagraph (d) hereof occur.

                  (c) Disability. "Disability" shall mean that the Executive has
been or will be unable to perform his duties under this Agreement for a period
of six or more months due to illness, accident or other physical or mental
incapacity.

                  (d) Involuntary Termination. "Involuntary Termination" shall
mean:

                         (i) The continued assignment to Executive of any duties
or the continued significant change in the Executive's duties, either of which
is substantially inconsistent with the Executive's duties immediately prior to
such assignment or change for a period of 30 days after notice thereof from
Executive to the Chief Executive Officer of the Company or the Board setting
forth in reasonable detail the respects in which Executive believes such
assignments or duties are significantly inconsistent with the Executive's prior
duties;

                         (ii) a reduction in Executive's Base Compensation,
other than any such reduction which is part of, and generally consistent with, a
general reduction of officer salaries, except that in no event shall the
Executive's Base Compensation be reduced below the rate set forth in Section
4(a) above as of the Effective Date;

                         (iii) a material reduction by the Company in the kind
or level of employee benefits (other than salary and bonus) to which Executive
is entitled immediately prior to such reduction with the result that Executive's
overall benefits package (other than salary and bonus) is substantially reduced
(other than any such reduction applicable to officers of the Company generally);

<PAGE>   7

                         (iv) the relocation of Executive's principal place for
the rendering of the services to be provided by him hereunder to a location more
than fifty (50) miles from the present location of the principal executive
office of the Company;

                         (v) any purported termination of the Executive's
employment by the Company other than for Cause;

                         (vi) the failure of the Company to obtain the
assumption of this Agreement by any successors contemplated in Section 9 below;
or

                         (vii) any material breach by the Company of any
material provision of this Agreement which continues uncured for 30 days
following notice thereof; provided that none of the foregoing shall constitute
Involuntary Termination to the extent Executive has agreed thereto

                  (e) Termination Date. "Termination Date: shall mean (i) if the
Executive's employment is terminated by the Company for Disability, thirty (30)
days after notice of termination is given to the Executive (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such thirty (30) day period), (ii) if the
Executive's employment is terminated by the Company for any other reason, the
date on which a notice of termination is given, or (iii) if the Agreement is
terminated by the Executive, the date on which the Executive delivers the notice
of termination to the Company.

         9. Successors.

                  (a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.

                  (b) Executive's Successors. The terms of this Agreement and
all rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

<PAGE>   8

         10. Notice.

                  (a) General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the
Executive, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.

                  (b) Notice of Termination. Any termination by the Company for
Cause or by the Executive as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice or termination to the
other party hereto given in accordance with Section 10 of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than 30 days after
the giving of such notice). The failure by the Executive to include in the
notice any fact or circumstance which contributes to a showing of Involuntary
Termination shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.

         11. Arbitration. At the option of either party, any and all disputes or
controversies whether of law or fact and of any nature whatsoever arising from
or respecting this Agreement shall be decided by arbitration by the American
Arbitration Association in accordance with the rules and regulations of that
Association.

                  The arbitrator shall be selected as follows: In the event the
Company and the Executive agree on one arbitrator, the arbitration shall be
conducted by such arbitrator. In the event the Company and the Executive do not
agree, the Company and the Executive shall each select one independent,
qualified arbitrator and the two arbitrators so selected shall select the third
arbitrator. The Company reserves the right to object to any individual
arbitrator who shall be employed by or affiliated with a competing organization.

                  Arbitration shall take place in Los Angeles, California, or
any other location mutually agreeable to the parties. At the request of either
party, arbitration proceedings will be conducted in the utmost secrecy; in such
case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or the Executive and their respective attorneys
and their respective experts who shall agree in advance and in writing to
receive all such information confidentially and to maintain such information in
secrecy until such information shall become generally known. The arbitrator, who
shall act by majority vote, shall be able to decree any and all relief of an
equitable nature, including but not limited to such relief as a temporary
restraining order, a temporary

<PAGE>   9

and/or a permanent injunction, and shall also be able to award damages, with or
without an accounting and costs, provided that punitive damages shall not be
awarded. The decree of judgment of an award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.

         Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or those authorize representatives shall have the right to
attend and/or participate in all the arbitration hearings in such manner as the
law shall require.

         12. Miscellaneous Provisions.

              (a) No Duty to Mitigate. The Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Executive may receive from any
other source.

              (b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

              (c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.

              (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.

              (e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

              (f) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be
void.

              (g) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.

<PAGE>   10

              (h) Assignment by Company. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of assignment. In the case of
any such assignment, the term "Company" when used in a section of this Agreement
shall mean the corporation that actually employs the Executive.

                  IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.

FREMONT                                 FREMONT GENERAL CORPORATION

                                        ----------------------------------------
                                        By:  James A. McIntyre
                                        Title:  Chairman of the Board and Chief
                                                Executive Officer

FCIG                                    FREMONT COMPENSATION INSURANCE GROUP

                                        ----------------------------------------
                                        By:  James A. McIntyre
                                        Title:  Chairman of the Board

EXECUTIVE                               WILLIAM B. O'HARA

                                        ----------------------------------------

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