THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

FileNET Corporation (FILE)

4/28/2006 Proxy Information

Mr. Smith was Chairman of FileNET Corporation from its inception in 1982 to December 2000, Chief Executive Officer from 1982 to April 1998 and was President from 1982 to May 1997.

On June 5, 2002, the Compensation Committee of the Company’s Board of Directors (the “Board”) approved a loan to Mr. Lee Roberts, Chief Executive Officer, for $1.9 million to enable him to purchase a home in Orange County, California. Mr. Roberts has repaid this loan in full as of December 10, 2004. Mr. Roberts made total payments of $2,020,576 including $120,576 in interest and $1,900,000 in principal.

Employees recognize both ordinary income and payroll withholding tax obligations upon the lapse of restrictions on restricted stock awards. Holders of vested shares of restricted stock may elect to have the Company withhold shares of Common Stock issuable under such award (or allow the return of shares of Common Stock) having a fair market value equal to the sums required to be withheld for payroll tax obligations. Accordingly, during 2005 the CEO and the President surrendered vested shares of Common Stock to the Company as consideration for the Company’s payment of applicable employee withholding taxes in the amount of $120,355 (4,448 shares were surrendered). The Company also offers unsecured interest-bearing promissory notes which are payable within approximately 90 days to non-executive officers and non-directors as consideration for withholding tax obligations. As of December 31, 2005, two non-executive officers had loans in the combined amount of $40,076 for this purpose. Both loans were repaid with interest by March 1, 2006.

4/1/2005 Proxy Information

On June 5, 2002, the Board approved a secured loan by the Company of $1.9 million to enable Mr. Roberts, the Company's Chief Executive Officer, to purchase a home in Orange County, California. The loan bears interest at 2.89% per annum (applicable short-term Federal interest rate). Accrued interest on the principal balance of this note is payable annually beginning February 15, 2003 and on each February 15th thereafter until the entire principal balance becomes due. The entire outstanding principal balance and any accrued interest is due and payable at the earliest of (a) June 7, 2005, (b) one year after termination of Mr. Roberts' employment by the Company, or (c) ninety (90) days after voluntary termination of employment by Mr. Roberts. Mr. Roberts repaid the loan balance in full as of December 10, 2004 and the Company executed and recorded a Substitution of Trustee and Full Reconveyance in favor of Mr. Roberts evidencing release of its lien. The Company also removed itself as the loss payee on the insurance policy for the mortgage interests. Mr. Roberts made total payments of $2,020,576, including $120,576 in interest and $1,900,000 in principal.

4/1/2004 Proxy Information

On June 5, 2002, the Board approved a secured loan by the Company of $1.9 million to enable Mr. Roberts, the Company's Chief Executive Officer, to purchase a home in Orange County, California. The loan bears interest at 2.89% per annum (applicable short-term Federal interest rate). Accrued interest on the principal balance of this note is payable annually beginning February 15, 2003 and on each February 15th thereafter until the entire principal balance becomes due. The entire outstanding principal balance and any accrued interest is due and payable at the earliest of (a) June 7, 2005, (b) one year after termination of Mr. Roberts' employment by the Company, or (c) ninety (90) days after voluntary termination of employment by Mr. Roberts. Mr. Roberts paid the February 15, 2003 and February 15, 2004 interest payments of approximately $37,000 and $53,500, respectively, and in December 2003 made a payment of approximately $294,000 toward the principal loan balance of $1.9 million. The outstanding balance as of December 31, 2003 was approximately $1.6 million.

Theodore J. Smith was the Chief Executive Officer and Chairman of FileNET Corporation from its inception in 1982 and President from 1982 to May 1997.

3/31/2003 Proxy Information

On June 5, 2002, the Board approved a secured loan by the Company of $1.9 million to enable Mr. Roberts, the Company's Chief Executive Officer, to purchase a home in Orange County, California. The loan bears interest at 2.89% per annum (applicable short-term Federal interest rate). Accrued interest on the principal balance of this note is payable annually beginning February 15, 2003 and on each February 15th thereafter until the entire principal balance becomes due. The entire outstanding principal balance and any accrued interest is due and payable at the earliest of (a) June 7, 2005, (b) one year after termination of Mr. Roberts' employment by the Company, or (c) ninety (90) days after voluntary termination of employment by Mr. Roberts. The outstanding balance as of December 31, 2002 is $1.9 million and Mr. Roberts paid the February 15, 2003 interest payment.

Mr. John Savage, a member of our Board and Audit Committee, is one of the Managing Directors of Alliant Partners who acted as financial advisor to eGrail in connection with FileNet's acquisition of eGrail and Alliant Partners was paid approximately $500,000 by eGrail. Accordingly, Mr. Savage recused himself from all discussions related to the acquisition between FileNet and eGrail and abstained from voting on the transaction.