FREMONT GENERAL CORP
EX-10.21 MANAGEMENT CONTINUITY-MURRAY L. ZOOTA
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>9
<FILENAME>0009.txt
<DESCRIPTION>EX-10.21 MANAGEMENT CONTINUITY-MURRAY L. ZOOTA
<TEXT>

                         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 Murray L.
Zoota (the "Executive"),  Fremont General Corporation  ("Fremont"),  and Fremont
Investment & Loan, a wholly-owned  subsidiary of Fremont ("FIL" 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:

     1.   DUTIES AND SCOPE OF EMPLOYMENT.

          (a)  POSITION.  The Company shall employ the Executive in the position
of  President   and  Chief   Executive   Officer  of  FIL,   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.

     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 $350,000. 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  within the thirty-six  (36) month period  following a Company Event,
then the Executive shall be entitled to receive severance benefits 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 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.

     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.

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

               (i)  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

               (ii) 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 FIL in a  transaction  or series of
transactions.

          (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);

               (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.

     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  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.

          (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

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


FIL                                    FREMONT INVESTMENT & LOAN

                                       /s/ LOUIS J. RAMPINO
                                       ---------------------------
                                       By: Louis J. Rampino
                                       Title:  Chairman of the Board


EXECUTIVE                              MURRAY L. ZOOTA

                                       /s/ MURRAY L. ZOOTA
                                       ---------------------------
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</DOCUMENT>
