REGISTRATION STATEMENT

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IFJzq4peKTcGDleu3hnGCrF3++Dv7dxLmnBwCmsyibnkjZajCg7Os51Y3DozphnY l3VVWDgX0kTwg4Yp8asIrg== 0000706015-01-000014.txt : 20010424 0000706015-01-000014.hdr.sgml : 20010424 ACCESSION NUMBER: 0000706015-01-000014 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010420 EFFECTIVENESS DATE: 20010420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FILENET CORP CENTRAL INDEX KEY: 0000706015 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 953757924 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-59274 FILM NUMBER: 1607503 BUSINESS ADDRESS: STREET 1: 3565 HARBOR BLVD CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7149663400 MAIL ADDRESS: STREET 1: 3565 HARBOR BLVD CITY: COSTA MESA STATE: CA ZIP: 926261420 S-8 1 0001.htm REGISTRATION STATEMENT REGISTRATION STATEMENT


As filed with the Securities and Exchange Commission on April 20, 2001                        Registration No. 333-______

=================================================================================================================================



                                             SECURITIES AND EXCHANGE COMMISSION
                                                   Washington, D.C. 20549


                                                          FORM S-8
                                                   REGISTRATION STATEMENT
                                                            Under
                                                 The Securities Act of 1933


                                                     FILENET CORPORATION
                                   (Exact name of registrant as specified in its charter)


                       Delaware                                                                  95-3757924
             (State or other jurisdiction                                             (IRS Employer Identification No.)
            of incorporation or organization)

                                                    3565 Harbor Boulevard
                                                Costa Mesa, California 92626
                                     (Address of principal executive offices)(Zip Code)


                                     SPECIAL OPTION GRANT TO MR. AURIEMMA PURSUANT TO A
                                               WRITTEN COMPENSATION AGREEMENT
                                                 (Full title of the Plan(s))


                                                       Lee D. Roberts
                                      Chairman of the Board and Chief Executive Officer
                                                     FILENET CORPORATION
                                     3565 Harbor Boulevard, Costa Mesa, California 92626
                                           (Name and address of agent for service)
                                                       (714) 327-3400
                                (Telephone number, including are code, of agent for service)


                                               CALCULATION OF REGISTRATION FEE

=================================================================================================================================

    Title of Securities            Amount to          Proposed Maximum           Proposed Maximum          Amount of
     to be Registered          be Registered (1)   Offering Price per Share   Aggregate Offering Price  Registration Fee

OPTION GRANT TO MR. SAM M. AURIEMMA
Common Stock, $0.01 par value    140,000 shares          $20.03(2)                $2,804,200(2)             $701.05
                                                                                                                   
                                                                                 Aggregate Filing Fee       $701.05
=================================================================================================================================


(1)  This Registration Statement shall also cover any additional shares of Common Stock which become issuable under
     the Special Option Grant to Mr. Auriemma by reason of any stock dividend, stock split, recapitalization or any
     other  similar   transaction  effected  without  the  Registrant's  receipt  of  consideration  which  results
     in an increase in the number of outstanding shares of Registrant's Common Stock.

(2)  Calculated  solely for  purposes of this offering under Rule 457(h) of the Securities Act of 1933, as amended,
     on the basis of the exercise price in effect for the Special Option Grant made to Mr. Auriemma.






                                                          PART II

                                     INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

         Item 3.  Incorporation of Documents by Reference

         FileNET Corporation (the "Registrant")  hereby incorporates by reference into this Registration  Statement
the following documents previously filed with the Securities and Exchange Commission (the "Commission"):

(a)      The  Registrant's  Annual  Report on Form 10-K for the fiscal year ended  December 31, 2000 filed with the
                  Commission on April 27, 2001;

(b)      The  Registrant's   Registration  Statement  No.  0-15997  on  Form  8-A  filed  with  the  Commission  on
                  June 24, 1987,  in which there is described the terms,  rights and  provisions  applicable to the
                  Registrant's outstanding Common Stock.

(c)      The  Registrant's  Registration  Statement No.  333-00676 on Form S-4 filed with the Commission on January
                  26, 1996, in which there is described  certain rights to purchase shares of  Registrant's  Common
                  Stock pursuant to a Rights  Agreement  dated as of November 4, 1988 between  FileNET  Corporation
                  and the First National Bank of Boston (the "Rights Agreement").

(d)      The  Registrant's  Quarterly  Report on Form 10-Q for the period ended  September  30, 1998 filed with the
                  Commission  on November 17, 1998,  in which  certain amendments  to the  Rights Agreement between
                  FileNET Corporation and BANKBOSTON N.A., formerly known as The First National Bank of Boston, are
                  set forth.

         All reports and definitive proxy or information  statements filed pursuant to Section 13(a),  13(c), 14 or
15(d) of the  Securities  Exchange Act of 1934,  as amended (the "1934 Act"),  after the date of this  Registration
Statement  and prior to the filing of a  post-effective  amendment  which  indicates  that all  securities  offered
hereby  have  been  sold or  which  deregisters  all  securities  then  remaining  unsold  shall  be  deemed  to be
incorporated  by  reference  into this  Registration  Statement  and to be a part hereof from the date of filing of
such  documents.  Any statement  contained in a document  incorporated  or deemed to be  incorporated  by reference
herein  shall be deemed to be modified or  superseded  for  purposes of this  Registration  Statement to the extent
that a statement  contained  herein or in any  subsequently  filed document which also is deemed to be incorporated
by reference  herein  modifies or supersedes  such  statement.  Any such statement so modified or superseded  shall
not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

         Item 4.  Description of Securities

         Not applicable.
                                                              II-1


         Item 5.  Experts

         The  consolidated  financial  statements  and  the  related  consolidated  financial  statement   schedule
incorporated  in this  prospectus by reference  from the Company's  Annual  Report on  Form 10-K for the year ended
December 31, 2000, have been audited by Deloitte and Touche LLP, independent  auditors,  as stated in their reports
which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.

         Item 6.  Indemnification of Directors and Officers

         Pursuant to the provisions of Section 145 of the General  Corporation  Law of Delaware,  the Registrant as
a Delaware  corporation  has power to  indemnify  any person  who was or is a party or is  threatened  to be made a
party to any threatened,  pending or completed action,  suit or proceeding (other than an action by or in the right
of the  Registrant)  by reason of the fact that he or she is or was a director,  officer,  employee or agent of the
Registrant or of any corporation,  partnership,  joint venture, trust or other enterprise for which he or she is or
was serving in such capacity at the request of the Registrant,  against any and all expenses,  judgments, fines and
amounts paid in settlement  which were reasonably  incurred by him or her in connection  with such action,  suit or
proceeding.  The power to  indemnify  applies  only if such  person  acted in good  faith and in a manner he or she
reasonably  believed to be in the best  interests,  or not opposed to the best  interests,  of the Registrant  and,
with respect to any  criminal  action or  proceeding,  if he or she had no  reasonable  cause to believe his or her
conduct was unlawful.

         The power to indemnify also applies to actions brought by or in the right of the  Registrant,  but only to
the extent of defense and  settlement  expenses  and not to any  satisfaction  of a judgment or  settlement  of the
claim  itself.  In  such  actions,  however,  no  indemnification  will be made if  there  is any  adjudication  of
negligence or misconduct,  unless the court,  in its discretion,  feels that in the light of all the  circumstances
indemnification should apply.

         To the extent any such person is successful in the defense of the actions  referred to above,  such person
is entitled  pursuant to Section 145 of the General  Corporation  Law of Delaware to  indemnification  as described
above.  Section 145 also grants power to advance litigation  expenses upon receipt of an undertaking on the part of
the  recipient  to repay  such  advances  in the  event no right to  indemnification  is  subsequently  shown.  The
Registrant may also obtain  insurance at its expense to protect anyone who might be indemnified,  or has a right to
insist on indemnification, under the statute.

         Item 7.  Exemption from Registration Claimed

         Not applicable.

         Item 8.  Exhibits

Exhibit No.         Exhibit

      4             Instruments  Defining Rights of  Stockholders.  Reference is made to  Registrant's  Registration
                    Statement on Form 8-A filed with the  Commission  on June 24, 1987,  together  with the exhibits
                    thereto,  which is  incorporated  herein by reference  pursuant to Item 3(c),(d) and (e) of this
                    Registration Statement.
      5             Opinion and Consent of Brobeck, Phleger and Harrison LLP.
     23.1           Independent Auditors' Consent-- Deloitte and Touche LLP.
     23.2           Consent of Brobeck, Phleger and Harrison LLP is contained in Exhibit 5.
     24             Power of Attorney.  Reference is made to page II-4 of this Registration Statement.
     99.1           Written Compensation Agreement between Registrant and Mr. Auriemma.
     99.2           Stock  Option  Agreement  (with  Notice of Grant of Stock  Option)  between  Registrant  and Mr.
                    Auriemma.


         Item 9.  Undertakings

A.       The undersigned  Registrant  hereby  undertakes:  (1) to file,  during any period in which offers or sales
are being made, a post-effective  amendment to this Registration  Statement (i) to include any prospectus  required
by Section 10(a)(3)  of the Securities Act of 1933, as amended (the "1933 Act"),  (ii) to reflect in the prospectus
any  facts or  events  arising  after  the  effective  date of this  Registration  Statement  (or the  most  recent
post-effective  amendment thereof) which,  individually or in the aggregate,  represent a fundamental change in the
information set forth in this Registration  Statement,  and (iii) to include any material  information with respect
to the plan of  distribution  not previously  disclosed in this  Registration  Statement or any material  change to
such information in this Registration  Statement;  provided,  however,  that  clauses (1)(i)  and (1)(ii) shall not

                                                              II-2


apply if the information  required to be included in a  post-effective  amendment by those  paragraphs is contained
in periodic  reports  filed by the  Registrant  pursuant to Section 13  or  Section 15(d)  of the 1934 Act that are
incorporated by reference into this Registration  Statement;  (2) that for the purpose of determining any liability
under the 1933  Act,  each  such  post-effective  amendment  shall be  deemed  to be a new  registration  statement
relating to the securities  offered  therein,  and the offering of such  securities at that time shall be deemed to
be the initial  bona fide  offering  thereof;  and (3) to  remove from  registration  by means of a  post-effective
amendment any of the  securities  being  registered  which remain unsold upon the  expiration or termination of the
Special Option Grant made to Mr. Auriemma.

B.       The undersigned  Registrant  hereby  undertakes  that, for purposes of determining any liability under the
1933 Act, each filing of the  Registrant's  annual report  pursuant to  Section 13(a)  or Section 15(d) of the 1934
Act that is incorporated  by reference into this  Registration  Statement shall be deemed to be a new  registration
statement  relating to the securities  offered  therein,  and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

C.       Insofar as  indemnification  for  liabilities  arising  under the 1933 Act may be permitted to  directors,
officers or controlling  persons of the  Registrant  pursuant to the indemnity  provisions  summarized in Item 6 or
otherwise,  the Registrant has been informed that in the opinion of the Commission such  indemnification is against
public  policy  as  expressed  in the 1933 Act and is,  therefore,  unenforceable.  In the  event  that a claim for
indemnification  against such  liabilities  (other than the payment by the Registrant of expenses  incurred or paid
by a director,  officer or controlling  person of the Registrant in the successful  defense of any action,  suit or
proceeding) is asserted by such director,  officer or controlling  person in connection  with the securities  being
registered,  the Registrant  will,  unless in the opinion of its counsel the matter has been settled by controlling
precedent,  submit to a court of  appropriate  jurisdiction  the  question  whether such  indemnification  by it is
against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.

                                                              II-3






                                                       SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,  the Registrant  certifies that it
has  reasonable  grounds  to  believe  that it meets all of the  requirements  for  filing on Form S-8 and has duly
caused this  Registration  Statement to be signed on its behalf by the undersigned,  thereunto duly authorized,  in
the City of Costa Mesa, State of California on April 20, 2001.


                                                     FILENET CORPORATION



                                                     By:    /s/  Lee D. Roberts                                     
                                                         Lee D. Roberts
                                                         Chairman and Chief Executive Officer



                                                 POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

     That the  undersigned  officers  and  directors  of FileNET  Corporation,  a Delaware  corporation,  do hereby
constitute and appoint Lee D. Roberts the lawful  attorney-in-fact  and agent,  with full power and authority to do
any and all acts and things and to execute any and all  instruments  which said attorney and agent  determines  may
be necessary or advisable or required to enable said  corporation  to comply with the  Securities  Act of 1933,  as
amended,  and any rules or regulation or requirements of the Securities and Exchange  Commission in connection with
this  Registration  Statement.  Without  limiting the generality of the foregoing  power and authority,  the powers
granted  include  the power and  authority  to sign the names of the  undersigned  officers  and  directors  in the
capacities  indicated below to this  Registration  Statement,  to any and all amendments,  both  pre-effective  and
post-effective,  and supplements to this  Registration  Statement and to any and all instruments or documents filed
as part of or in conjunction with this  Registration  Statement or amendments or supplements  thereof,  and each of
the  undersigned  hereby  ratifies and  confirms  all that said  attorney and agent shall do or cause to be done by
virtue hereof.  This Power of Attorney may be signed in several counterparts.

         IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated.

         Pursuant to the requirements of the Securities Act of 1933, as amended,  this  Registration  Statement has
been signed below by the following persons in the capacities and on the dates indicated.

              Signatures                                     Title                                  Date






  /s/ Lee D. Roberts                Chairman and Chief Executive Officer                     April 20, 2001     
Lee D. Roberts


                                                              II-4




              Signatures                                     Title                                  Date




                                     Senior Vice President, Chief Financial
                                     Officer and Secretary (Principal Financial
 /s/ Sam M. Auriemma                 Officer and Principal Accounting Officer)               April 20, 2001     
Sam M. Auriemma



 /s/  Theodore J. Smith              Director                                                April 20, 2001     
Theodore J. Smith



 /s/ John C. Savage                  Director                                                April 20, 2001     
John C. Savage



 /s/ William P. Lyons                Director                                                April 20, 2001     
William P. Lyons



 /s/ L. George Klaus                 Director                                                April 20, 2001     
L. George Klaus



 /s/ Roger S. Siboni                 Director                                                April 20, 2001     
Roger S. Siboni


                                                              II-5






                                         SECURITIES AND EXCHANGE COMMISSION
                                               WASHINGTON, D.C. 20549


                                                     EXHIBITS

                                                        TO

                                                     FORM S-8

                                                      UNDER

                                              SECURITIES ACT OF 1933


                                               FILENET CORPORATION



                                                   EXHIBIT INDEX

Exhibit No.       Exhibit

      4           Instruments  Defining  Rights of  Stockholders.  Reference  is made to  Registrant's  Registration
                  Statement  on Form 8-A filed with the  Commission  on June 24,  1987,  together  with the exhibits
                  thereto,  which is  incorporated  herein by  reference  pursuant to Item  3(c),(d) and (e) of this
                  Registration Statement.
      5           Opinion and Consent of Brobeck, Phleger and Harrison LLP.
     23.1         Independent Auditors' Consent-- Deloitte and Touche LLP.
     23.2         Consent of Brobeck, Phleger and Harrison LLP is contained in Exhibit 5.
     24           Power of Attorney.  Reference is made to page II-4 of this Registration Statement.
     99.1         Written Compensation Agreement between Registrant and Mr. Auriemma.
     99.2         Stock Option Agreement (with Notice of Grant of Stock Option) between Registrant and Mr. Auriemma.





                                                     EXHIBIT 5

                              OPINION AND CONSENT OF BROBECK, PHLEGER and HARRISON LLP


                                                   April 20, 2001

FileNET Corporation
3565 Harbor Boulevard
Costa Mesa, CA  92626

         Re:      FileNET Corporation - Registration Statement for Offering of an
                  Aggregate of 140,000 Shares of Common Stock

Ladies and Gentlemen:

         We have acted as counsel to FileNET  Corporation,  a Delaware  corporation (the "Company"),  in connection
with the registration on Form S-8 (the "Registration  Statement") under the Securities Act of 1933, as amended,  of
140,000  shares of the Company's  common stock  authorized  for issuance  under a stock option grant (the "Option")
made to Mr. Sam M. Auriemma  pursuant to a Written  Compensation  Agreement and Stock Option Agreement  between him
and the Company.

         This  opinion  is being  furnished  in  accordance  with the  requirements  of Item 8 of Form S-8 and Item
601(b)(5)(i) of Regulation S-K.

         We have reviewed the Company's  charter  documents and the corporate  proceedings  taken by the Company in
connection with the  authorization  of the Special Option Grant to Mr.  Auriemma.  Based on such review,  we are of
the  opinion  that  if,  as and when the  shares  of the  Company's  common  stock  are  issued  and sold  (and the
consideration  therefor received)  pursuant to the  provisions of the Stock Option Agreement  evidencing the Option
and in accordance with the  Registration Statement, such shares will be duly authorized, legally issued, fully paid
and non-assessable.

         We consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement.

         This  opinion  letter is rendered as of the date first  written  above and we disclaim any  obligation  to
advise you of facts,  circumstances,  events or  developments  which  hereafter may be brought to our attention and
which may alter,  affect or modify the opinion  expressed  herein.  Our opinion is expressly limited to the matters
set forth above and we render no opinion,  whether by  implication or otherwise,  as to any other matters  relating
to the Company or the shares of the Company's common stock issuable under the Option.

                                                     Very truly yours,

                                                     /s/  Brobeck, Phleger and Harrison

                                                     BROBECK, PHLEGER and HARRISON LLP





                                                   EXHIBIT 23.1

                                           INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in this Registration  Statement of FileNET  Corporation on Form S-8 of
our reports  dated  January 23, 2001,  appearing  in the Annual Report on Form 10-K of FileNET Corporation  for the
year ended December 31, 2000, and to the reference to us under the heading as "Experts" in the prospectus  which is
part of this Registration Statement.




DELOITTE and TOUCHE LLP

Costa Mesa, California
Date:  April 17, 2001

EX-99.1 2 0002.htm COMPENSATION AGREEMENT Written Compensation Agreement between Registrant and Mr. Auriemma

EXHIBIT 99.1
COMPENSATION AGREEMENT

Agreement dated as of the 13th day of September, 2000 by and between Sam M. Auriemma ("Optionee") and FileNET
Corporation, a Delaware corporation (the Corporation).

W I T N E S S E T H

WHEREAS, Optionee is to provide services to the Corporation, and the Corporation wishes to provide
an equity incentive to Optionee to provide such services.

NOW, THEREFORE, in consideration of the above premises, the parties hereto agree as follows:

1. On September 13, 2000 Optionee was granted an option to acquire 140,000 shares of the Corporation's Common Stock (the
Option) under the terms and conditions set forth in the Stock Option Agreement, attached hereto as Exhibit A.

2. Corporation and Optionee acknowledge and agree that the Option is granted as compensation for services and not for
any capital-raising purposes or in connection with any capital-raising activities.

3. This agreement is intended to constitute a written compensation contract within the meaning of Rule 701 of the
Securities Act of 1933, as amended.

4. Nothing herein or in the Stock Option Agreement shall confer upon Optionee any right to continue in the Corporation's
employ or service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the
Corporation or Optionee, which rights are hereby expressly reserved by each party, to terminate Optionee's service at any time
for any reason, with or without cause.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date first above written.

OPTIONEE: FILENET CORPORATION

Sam M. Auriemma By:

Title:

EXHIBIT A

STOCK OPTION AGREEMENT

EX-99.2 3 0003.htm NON - QUALIFIED STOCK OPTION AGREEMENT Stock Option Agreement (with Notice of Grant of Stock Option) between Registrant and Mr. Auriemma.

EXHIBIT 99.2

FILENET CORPORATION
NOTICE OF GRANT OF STOCK OPTION

Notice is hereby given of the following option grant (the Option) to purchase shares of the
Common Stock of FileNET Corporation (the Corporation):

Optionee: Sam M. Auriemma

Grant Date: September 13, 2000

Exercise Price: $ 20.03 per share

Number of Option Shares: 140,000 shares

Expiration Date: September 12, 2010

Type of Option: Incentive Stock Option

X Non-Statutory Stock Option

Exercise Schedule: The Option shall become exercisable for twenty-five percent (25%) of the
Option Shares upon Optionee's completion of one (1) year of Service measured from the Grant
Date and shall become exercisable for the balance of the Option Shares in a series of
thirty-six (36) successive equal monthly installments upon Optionee's completion of each
additional month of Service over the thirty-six (36) month period measured from the first
anniversary of the Grant Date.

Optionee hereby agrees to be bound by all the terms and conditions of the Option as set forth
in the Stock Option Agreement and Prospectus for Special Stock Option Grant attached hereto as Exhibits A and B.

All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or
in the attached Stock Option Agreement.

DATED: SEPTEMBER 13, 2000

FILENET CORPORATION

By:

Title:

OPTIONEE: SAM M. AURIEMMA

Address:

Attachments:
Exhibit A - Stock Option Agreement
Exhibit B - Prospectus for Special Stock Option Grant

FILENET CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

RECITALS

A. The Compensation Committee has approved a stock option grant to Optionee in order to attract and
retain Optionee to serve the Corporation in the capacity of Chief Financial Officer.

B. The option evidenced by this Agreement is granted to Optionee in consideration of the services
Optionee is to render the Corporation and not for any capital-raising purposes or in connection with any capital-raising
activities.

C. The granted option is intended to be a non-qualified stock option which does not satisfy the
requirements of Section 422 of the Code.

D All capitalized terms in this Agreement shall have the meaning assigned to them in the attached
Appendix.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date, an
option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from
time to time during the option term specified in Paragraph 2 at the Exercise Price.

2. Option Term. This option shall have a term of ten (10) years measured from the Grant
Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

3. Limited Transferability. This option shall be neither transferable nor assignable by
Optionee other than by will or by the laws of descent and distribution following Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee. However, this option may, in connection with the Optionee's estate plan,
be assigned in whole or in part during Optionee's lifetime to one or more members of the Optionee's immediate family or to a
trust established for the exclusive benefit of one or more such family members. The assigned portion shall be
exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment. The
terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as the Compensation Committee may deem appropriate.

4. Dates of Exercise. The Option shall become exercisable for the Option Shares in a
series of installments over Optionee's period of Service in accordance with the Exercise Schedule set forth in the Grant
Notice. As the option becomes exercisable for one or more of such installments, those installments shall accumulate and the
option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option
term under Paragraph 5 or 6.

5. Cessation of Service. The option term specified in Paragraph 2 shall terminate (and
this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become
applicable:

(i) Should Optionee cease to remain in Service for any reason
(other than death or Permanent Disability) while this option is outstanding, then Optionee
shall have a period of three (3) months (commencing with the date of such cessation of Service)
during which to exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date.

(ii) Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom the option is
transferred pursuant to Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise this option. Such right shall lapse, and this
option shall cease to be outstanding, upon the earlier of (i) the expiration of the twelve
-------
(12)- month period measured from the date of Optionee's death or (ii) the Expiration Date.

(iii) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee shall have a period of twelve (12)
months (commencing with the date of such cessation of Service) during which to exercise this
option. In no event shall this option be exercisable at any time after the Expiration Date.

(iv) During the applicable post-Service exercise period, this
option may not be exercised in the aggregate for more than the number of Option Shares for
which the option is exercisable at the time of Optionee's cessation of Service. Upon the
expiration of such exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any exercisable Option Shares for which the option
has not otherwise been exercised. However, this option shall, immediately upon Optionee's
cessation of Service, terminate and cease to be outstanding with respect to any Option Shares
for which the option is not otherwise at that time exercisable.

6. Special Acceleration of Option.

(a) This option, to the extent outstanding at the time of a Corporate Transaction
but not otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately prior
to the effective date of the Corporate Transaction, become exercisable for all of the Option Shares at the time
subject to this option and may be exercised for any or all of those Option Shares as fully-vested shares of

Common Stock. No such acceleration of this option, however, shall occur if and to the extent: (i) this option
is, in connection with the Corporate Transaction, either to be assumed by the successor corporation (or parent
thereof) or to be replaced with a comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof) or (ii) this option is to be replaced with a cash incentive program of the
successor corporation which preserves the spread existing at the time of the Corporate Transaction on any Option
Shares for which the option is not otherwise at that time exercisable (the excess of the Fair Market Value of
those Option Shares over the aggregate Exercise Price payable for such shares) and provides for subsequent
pay-out in accordance with the vesting schedule in effect for those Option Shares pursuant to the Exercise
Schedule set forth in the Grant Notice. The determination of option comparability under clause (i) shall be made
by the Compensation Committee, and such determination shall be final, binding and conclusive.

(b) Immediately following the Corporate Transaction, this option shall terminate
and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction.

(c) If this option is assumed in connection with a Corporate Transaction, then
this option shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number
and class of securities which would have been issuable to Optionee in consummation of such Corporate Transaction
had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall
also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same.

(d) This Agreement shall not in any way affect the right of the Corporation to
adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.

7. Adjustment in Option Shares. Should any change be made to the Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made to
(i) the number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

8. Stockholder Rights. The holder of this option shall not have any stockholder rights
with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder
of record of the purchased shares.

9. Manner of Exercising Option.

(a) In order to exercise this option with respect to all or any part of the Option Shares for which
this option is at the time exercisable, Optionee (or any other person or persons exercising the option) must take the following
actions:

(i) Execute and deliver to the Corporation a Notice of Exercise for the number of Option
Shares for which the option is exercised.

(ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the
following forms:

(A) cash or check made payable to the Corporation;

(B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite period necessary to
avoid a charge to the Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date; or

(C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising the option)
shall concurrently provide irrevocable instructions (a) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) to the Corporation to
deliver the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale.

Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must accompany the
Notice of Exercise.

(iii) Furnish to the Corporation appropriate documentation that the person
or persons exercising the option (if other than Optionee) have the right to exercise this option.

(iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

(b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf of
Optionee (or any other person or persons exercising this option) a certificate for the purchased Option Shares.

10. Compliance with Laws and Regulations. The exercise of this option and the
issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all
applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for trading at the time of such exercise and issuance.

11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3 and
6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs and legatees of
Optionee's estate.

12. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State's conflict-of-laws rules.

13. Notices. Any notice required to be given or delivered to the Corporation under the
terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below
Optionee's signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

14. Leave of Absence. The following provisions shall apply upon the Optionee's
commencement of an authorized leave of absence:

(i) The exercise schedule in effect under the Grant Notice shall be frozen as of
the first day of the authorized leave, and the option shall not become exercisable for any additional installments
of the Option Shares during the period Optionee remains on such leave.

(ii) Should Optionee resume active Employee status within sixty (60) days after
the start date of the authorized leave, Optionee shall, for purposes of the exercise schedule set forth in the
Grant Notice, receive Service credit for the entire period of such leave. If Optionee does not resume active Employee
status within such sixty (60)-day period, then no Service credit shall be given for the period of the leave.

(iii) In no event shall this option become exercisable for any additional Option
Shares or otherwise remain outstanding if Optionee does not resume Employee status prior to the Expiration Date of the
option term.

APPENDIX

The following definitions shall be in effect under the Agreement:

A. Agreement shall mean this Stock Option Agreement.

B. Board shall mean the Corporation's Board of Directors.

C. Code shall mean the Internal Revenue Code of 1986, as amended.

D. Common Stock shall mean the Corporation's common stock.

E. Compensation Committee shall mean the Compensation Committee of the Board.

F. Corporate Transaction shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction, or

(ii) the sale, transfer or other disposition of all or substantially all
of the Corporation's assets in complete liquidation or dissolution of the Corporation.

G. Corporation shall mean FileNET Corporation, a Delaware corporation.

H. Employee shall mean the Optionee in his capacity as an employee of the Corporation (or
any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and
the manner and method of performance.

I. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

J. Exercise Price shall mean the exercise price per share as specified in the Grant
Notice.

J. Exercise Schedule shall mean the schedule set forth in the Grant Notice pursuant to
which the option shall vest and become exercisable for the Option Shares in a series of installments over the Optionee's
period of Service.

K. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

L. Fair Market Value per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:

(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the average of the high and low selling prices per
share of Common Stock on the date in question, as such prices are reported by the National
Association of Securities Dealers on the Nasdaq National Market and published in The Wall
Street Journal. If there are no selling prices quoted for the Common Stock on the date in
question, then the Fair Market Value shall be the average of the high and low selling prices on
the last preceding date for which such quotations exist.

(ii) If the Common Stock is at the time listed on any Stock Exchange, then
the Fair Market Value shall be the average high and low selling prices per share of Common
Stock on the date in question on the Stock Exchange determined by the Compensation Committee to
be the primary market for the Common Stock, as such prices are officially quoted in the
composite tape of transactions on such exchange and published in The Wall Street Journal. If
there are no selling prices quoted for the Common Stock on the date in question, then the Fair
Market Value shall be the average of the high and low selling prices on the last preceding date
for which such quotations exist.

M. Grant Date shall mean the date of grant of the option as specified in the Grant Notice.

N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying the
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby.

O. Non-Qualified Option shall mean an option not intended to satisfy the requirements of
Code Section 422.

P. Notice of Exercise shall mean the written notice of the option exercise on the form
provided by the Corporation for such purpose.

Q. Option Shares shall mean the number of shares of Common Stock subject to the option as
specified in the Grant Notice.

R. Optionee shall mean the person to whom the option is granted as specified in the Grant
Notice.

S. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

T. Permanent Disability shall mean the inability of Optionee to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12) months or more.

U. Service shall mean the Optionee's performance of services for the Corporation (or any
Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or
independent advisor.

V. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange.

W. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken
chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

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