SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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X
 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
CHRISTIAN MARTYN D
(Last) (First) (Middle)
3565 HARBOR BOULEVARD
(Street)
COSTA MESA CA 92626-1420
(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
FILENET CORP [ FILE ] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director 10% Owner
X Officer (give title below) Other (specify below)
Exec VP/Chief Marketing Off
3. Date of Earliest Transaction (Month/Day/Year)
10/12/2006
4. If Amendment, Date of Original Filed (Month/Day/Year)
 6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 10/12/2006 D 11,465(1) D $35 0 D
Common Stock 10/12/2006 D 6,145(2) D (2) 0 D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Restricted Stock Units (3) 10/12/2006 D 105,000 (4) (4) Common Stock 105,000 (4) 0 D
Stock Option (right to buy) $23.47 10/12/2006 D 3,906 (5) 01/02/2011 Common Stock 3,906 $11.53 0 D
Stock Option (right to buy) $13.21 10/12/2006 D 3,125 (6) 12/11/2012 Common Stock 3,125 $21.79 0 D
Stock Option (right to buy) $13.21 10/12/2006 D 417 (7) 12/11/2012 Common Stock 1,667 $21.79 0 D
Stock Option (right to buy) $20.435 10/12/2006 D 1,667 (8) 08/26/2013 Common Stock 1,667 $14.565 0 D
Stock Option (right to buy) $26.505 10/12/2006 D 14,167 (9) 12/02/2013 Common Stock 14,167 $8.495 0 D
Stock Option (right to buy) $26.505 10/12/2006 D 5,833 (10) 12/02/2013 Common Stock 5,833 $8.495 0 D
Stock Option (right to buy) $28.185 10/12/2006 D 48,438 (11) 02/25/2014 Common Stock 48,438 $6.815 0 D
Stock Option (right to buy) $28.185 10/12/2006 D 26,562 (12) 02/25/2014 Common Stock 26,562 $6.815 0 D
Stock Option (right to buy) $26.64 10/12/2006 D 11,459 (13) 12/15/2014 Common Stock 11,459 $8.36 0 D
Stock Option $26.64 10/12/2006 D 13,541 (14) 12/15/2014 Common Stock 13,541 $8.36 0 D
Explanation of Responses:
1. Disposed of pursuant to the merger agreement (the "Merger Agreement") among the Issuer, International Business Machines Corporation ("IBM") and Nassau Acquisition Corp., a wholly-owned subsidiary of IBM (the "Merger"), which provides for the cancellation of shares of Common Stock of the Issuer in exchange for $35.00 per share (the "Merger Consideration").
2. Represents shares of unvested restricted stock converted in the Merger into a cash retention program at IBM in the aggregate amount payable of $215,110, subject to satisfaction of certain vesting conditions.
3. Each RSU represents a right to receive one (1) share of Issuer's Common Stock.
4. The RSUs originally vested based upon targeted financial performance goals subject to partial acceleration upon change of control. Pursuant to the Merger, 50% of the RSUs, representing 52,500 shares, will accelerate vesting and be cashed out for the Merger Consideration totaling $1,837,500. The remaining 50% of the RSUs, representing 52,500 shares, will be forfeited and canceled without payment.
5. This option, which provided for vesting in installments of 25% on January 2, 2002 and as to 1/36 of the total grant amount each month thereafter, was converted pursuant to the Merger Agreement in exchange for the per share Merger Consideration, less the applicable per share exercise price.
6. This option, which provided for vesting in installments of 25% on December 11, 2003 and as to 1/36 of the total grant amount each month thereafter, was converted pursuant to the Merger Agreement in exchange for the per share Merger Consideration, less the applicable per share exercise price.
7. This option, which provided for vesting in installments of 25% on December 11, 2003 and as to 1/36 of the total grant amount each month thereafter, was disposed of pursuant to the Merger Agreement into options to acquire 176 shares of common stock of IBM at a per share exercise price of $31.16.
8. This option, which provided for vesting in installments of 50% on August 26, 2004 and as to 1/12 of the total grant amount each month thereafter, was converted pursuant to the Merger Agreement in exchange for the per share Merger Consideration, less the applicable per share exercise price.
9. This option, which provided for vesting in installments of 25% on December 2, 2004 and as to 1/36 of the total grant amount each month thereafter, was converted pursuant to the Merger Agreement in exchange for the per share Merger Consideration, less the applicable per share exercise price.
10. This option, which provided for vesting in installments of 25% on December 2, 2004 and as to 1/36 of the total grant amount each month thereafter, was disposed of pursuant to the Merger Agreement into options to acquire 2,472 shares of common stock of IBM at a per share exercise price of $62.52.
11. This option, which provided for vesting in installments of 25% on February 25, 2005 and as to 1/36 of the total grant amount each month thereafter, was converted pursuant to the Merger Agreement in exchange for the per share Merger Consideration, less the applicable per share exercise price.
12. This option, which provided for vesting in installments of 25% on August 30, 2005 and as to 1/36 of the total grant amount each month thereafter, was disposed of pursuant to the Merger Agreement into options to acquire 11,259 shares of common stock of IBM at a per share exercise price of $66.49.
13. This option, which provided for vesting in installments of 25% on December 15, 2005 and as to 1/36 of the total grant amount each month thereafter, was converted pursuant to the Merger Agreement in exchange for the per share Merger Consideration, less the applicable per share exercise price.
14. This option, which provided for vesting in installments of 25% on December 15, 2005 and as to 1/36 of the total grant amount each month thereafter, was disposed of pursuant to the Merger Agreement into options to acquire 5,960 shares of common stock of IBM at a per share exercise price of $62.84.
Sam M. Auriemma, Attorney-in-Fact for Martyn D. Christian 10/16/2006
** Signature of Reporting Person Date
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