EX-10.16






Exhibit 10.16




First Interstate BancSystem, Inc. 2006 Equity Compensation Plan

Restricted Stock Grant Agreement




PARTICIPANT: Lyle R. Knight



DATE OF GRANT:  March 2, 2009



This Restricted Stock Grant Agreement (“Agreement”) is made and entered into as of the date
specified above between First Interstate BancSystem, Inc., a Montana corporation (the “Company”),
and the above named Participant, an employee of the Company.



The Company and Participant agree as follows:





	1.	 	Precedence of Plan. This Agreement is subject to and shall be construed in
accordance with the terms and conditions of the First Interstate BancSystem, Inc. 2006 Equity
Compensation Plan (the “Plan”), as now or hereinafter in effect. Any capitalized terms that
are used in this Agreement without being defined and that are defined in the Plan shall have
the meaning specified in the Plan.
	 
	2.	 	Grant of Restricted Stock Benefit. Participant is hereby granted a Restricted Stock
Benefit of 3,557 shares of Common Stock (the “Shares”).
	 
	3.	 	Vesting.






	 	a.	 	Performance Vesting. The Restricted Stock Benefit shall vest on December 31,
2010 (the “Vesting Date”) at a percentage determined by the independent members of the
Compensation Committee and shall be based upon the independent members of the
compensation committee’s assessment of Lyle’s accomplishments in the following six
areas: 1) Building a high quality leadership team to succeed him, 2) Capital, 3)
Liquidity, 4) Financial performance, 5) Loan Quality, and 6) Integration of the South
Dakota banks.
	 
	 	b.	 	Death of Participant. Upon the death of the Participant, 100% of the
Restricted Stock Benefit shall vest and become exercisable (unless previously
forfeited).
	 
	 	c.	 	Dissolution or Change in Control. As provided in the Plan, if FIBS is
Dissolved or if FIBS is a party to a merger, reorganization, or consolidation in which
FIBS is not the surviving corporation (a “Change in Control”), 100% of the Restricted
Stock Benefit shall vest and become exercisable (unless previously forfeited).






	4.	 	Unvested Shares Subject to Forfeiture. In the event that Participant terminates
service with the Company for any reason prior to the Vesting Date, including disability,
voluntary or involuntary termination of employment, any unvested portion of the Shares shall
be forfeited to the Company as of the date of termination of service.
	 
	5.	 	Stock Register and Certificates. The Shares shall be recorded in the stock register
of the Company in the name of Participant. A stock certificate or certificates representing
the Shares shall be registered in the name of Participant, but such certificates shall remain
in the custody of the Company. Participant shall deposit with the Company a Stock





			
	 	 	 
	 
	Restricted Stock Grant Agreement
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	 	 	Assignment Separate from Certificate in the form attached below as Exhibit A,
endorsed in blank, so as to permit retransfer to the Company of all or a portion of the
Shares that shall be forfeited or otherwise not become vested in accordance with the Plan
and this Agreement.
	 
	6.	 	Rights with Respect to Shares. Participant shall have the right to vote the Shares
(to the extent of the voting rights of said Shares, if any), to receive and retain all regular
cash dividends and such other distributions as the Board of Directors of the Company may, in
its discretion, designate, pay or distribute on such Shares, and to exercise all other rights,
powers and privileges of a holder of Common Stock with respect to such Shares, except as set
forth in this Agreement and the Plan.
	 
	7.	 	Responsibility for Taxes. Participant may complete and file with the Internal
Revenue Service an election in substantially the form attached hereto as Exhibit B
pursuant to Section 83(b) of the Internal Revenue Code (“Code”) to be taxed currently on the
fair market value of the Shares, without regard to the vesting restrictions set forth in this
Agreement. Participant shall be responsible for all taxes associated with the acceptance of
the Restricted Stock Benefit, including any tax liability associated with the representation
of fair market value if the election is made pursuant to Code Section 83(b).
	 
	8.	 	Shareholders’ Agreement. Coincident with the vesting of the Shares and as a
condition precedent to the Company’s obligation to deliver the Shares to Participant,
Participant shall execute and deliver to the Company Participant’s agreement to be bound by
the terms of the current form of applicable Shareholder’s Agreement utilized by the Company.
	 
	9.	 	General Provisions.






	 	a.	 	Withholding. Participant shall reimburse the Company, in cash, by certified or
bank cashier’s check, or any other form of legal payment permitted by the Company for
any federal, state or local taxes required by law to be withheld with respect to the
vesting of the Shares. The Company shall have the right to deduct from any salary or
other payments to be made to Participant any federal, state or local taxes required by
law to be so withheld. The Company’s obligation to deliver a certificate to
Participant representing the Shares upon vesting of the Shares is subject to the
payment by Participant of any applicable federal, state and local withholding tax.
	 
	 	b.	 	Receipt of Plan. By entering into this Agreement, Participant acknowledges (i)
that he or she has received and read a copy of the Plan and (ii) that this Agreement is
subject to and shall be construed in accordance with the terms and conditions of the
Plan, as now or hereinafter in effect.
	 
	 	c.	 	Legends. Certificates representing the Shares prior to vesting shall contain
the following legend or a legend similar thereto:






	 	 	 	THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
THE PROVISIONS OF THE COMPANY’S 2006 EQUITY COMPENSATION PLAN AND AN





			
	 	 	 
	 
	Restricted Stock Grant Agreement
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	 	 	 	AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER WHEREBY THE TRANSFER
IN ANY MANNER OF SUCH SHARES OF STOCK OR ANY INTEREST THEREIN IS RESTRICTED
AND THE SHARES OF STOCK ARE SUBJECT TO FORFEITURE. A COPY OF SAID PLAN AND
SAID AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY.






	 	 	 	Certificates may also contain such other legends and transfer restrictions as the
Company shall deem reasonably necessary or desirable, including, without limitation,
legends restricting transfer of the Common Stock until there has been compliance
with federal and state securities laws.
	 
	 	d.	 	Not an Employment Contract. This Agreement is not an employment contract and
nothing in this Agreement shall be deemed to create in any way whatsoever any
obligation on the part of Participant to remain in the Service of the Company, or of
the Company to continue Participant in the Service of the Company.
	 
	 	e.	 	Specific Enforcement. Because of the unique value of the Shares, in addition
to any other remedies that the Company may have upon the breach of the agreements
contained herein, the obligations of Participant shall be specifically enforceable.
	 
	 	f.	 	Costs of Enforcement. In any action at law or in equity to enforce any of the
provisions or rights under this Agreement, the unsuccessful party of such litigation,
as determined by any court of competent jurisdiction in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and reasonable attorneys’
fees incurred therein by such party or parties (including without limitation such
costs, expenses and fees on any appeals), and if such successful party shall recover
judgment in any action or proceeding, such costs, expenses and attorneys’ fees shall be
included as part of the judgment.
	 
	 	g.	 	Further Action. The parties agree to execute such further instruments and to
take such further action as reasonably may be necessary to carry out the intent of this
Agreement.
	 
	 	h.	 	Interpretation. The interpretations and constructions of any provision of and
determinations on any question arising under the Plan or this Agreement shall be made
by the Company, and all such interpretations, constructions and determinations shall be
final and conclusive as to all parties. This Agreement, as issued pursuant to the
Plan, constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements, representations
and understandings. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision hereof. This
Agreement may be executed in counterparts, all of which shall be deemed to be one and
the same instrument, and it shall be sufficient for each party to have executed at
least one, but not necessarily the same, counterpart. The headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement in any way.





			
	 	 	 
	 
	Restricted Stock Grant Agreement
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	 	i.	 	Assignment. This Agreement shall be binding upon the parties and their
respective legal representatives, beneficiaries, successors and assigns.
	 
	 	j.	 	Notices. All notices or other communications that are required to be given or
may be given to either party pursuant to the terms of this Agreement shall be in
writing and shall be delivered personally or by registered or certified mail, postage
prepaid, to the address of the parties as set forth following the signature of such
party. Notice shall be deemed given on the date of delivery in the case of personal
delivery or on the delivery or refusal date as specified on the return receipt in the
case of registered or certified mail. Either party may change its address for such
communications by giving notice thereof to the other party in conformity with this
section.
	 
	 	k.	 	Governing Law; Venue. This Agreement and the rights and obligations of the
parties hereto shall be governed by and construed in accordance with the laws of the
State of Montana. The parties agree that any action brought by either party to
interpret or enforce any provision of the Plan or this Agreement shall be brought in,
and each party agrees to, and does hereby, submit to the jurisdiction and venue of, the
appropriate state or federal court for the district of Montana.




IN WITNESS WHEREOF, the Company, by a duly authorized officer of the Company, and Participant have
executed this Agreement on March 2, 2009, effective as of the date of grant.




	 	 	 
	FIRST INTERSTATE BANCSYSTEM, INC.

	 	PARTICIPANT
	 
	 	 
	By: /s/ JAMES W. HAUGH
 


	 	/s/ LYLE R. KNIGHT 

	James W. Haugh

	 	Signature
	 
	 	 
	 

	 	Lyle R. Knight 

	Title: Chairman, Compensation Committee

	 	Print Name
	 
	 	 
	 

	 	Address: 2555 Blue Creek Road
	401 No. 31st St.

	 	Billings, MT 59101
	Billings, MT 59101
	 	 






			
	 	 	 
	 
	Restricted Stock Grant Agreement
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Exhibit A

Stock Assignment Separate From Certificate



FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto First Interstate
BancSystem, Inc., a Montana corporation (the “Company”)
_________________________________ (________)
shares of Common Stock of the Company, standing in the undersigned’s name on the books of said
corporation represented by Certificate No. _________________, and does hereby irrevocably
constitute and appoint the Secretary of the Company as attorney to transfer the said stock on the
books of the said corporation with full power of substitution in the premises.




	 	 	 	 	 
	Dated:
 


	 	
 
Signature
	 	 
	 
	 	 	 	 
	 

	 	 
Print Name	 	 






 
Stock Assignment Separate from Certificate




 









 








Exhibit B




Election to Include Value of Restricted Property in Gross Income

Pursuant to Section 83(b) of the Internal Revenue Code



This election form is to be filed with the IRS Service Center with which the Participant files his
or her return. It should be mailed “Certified Mail” and postmarked by the post office to establish
proof of timely filing. Timely filing requires such mailing to occur within thirty (30) days
following the date of the grant. One copy must be provided to the Company and one copy must be
filed with the Participant’s tax return for the taxable year of exercise. Participant may also
wish to determine the relevant state tax procedure for the state in which Participant resides.



Pursuant to the Restricted Stock Grant Agreement entered into by and between the undersigned
Participant and First Interstate BancSystem, Inc., a Montana corporation (the “Company”), as of
_______________,
20___ (the “Award Agreement”), Participant has acquired _________ shares of Common Stock of the Company (the
“Shares”) which are subject to a substantial risk of forfeiture under the Award Agreement.
Participant desires to make an election to have the Shares taxed under the provisions of Section
83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) at the time Participant
acquired the Shares.



Therefore, pursuant to Code Section 83(b) and Treasury Regulation Section 1.83-2, Participant
hereby makes an election to report as taxable income in _______________ [YEAR] the Shares’ fair market value on
____________________ [DATE], the date on which Participant acquired the Shares (or any subsequent date that may be
determined to be the date of transfer for purposes of the Code).



The following information is supplied in accordance with Treasury Regulation Section 1.83-2(e):





	1.	 	The name, address and social security number of Participant: 






 





 






	2.	 	A description of the property with respect to which the election is being made:
	 
	 	 	Shares of Common Stock of First Interstate BancSystem, Inc., a Montana corporation.
	 
	3.	 	The date on which the property was transferred:                     .
	 
	 	 	The taxable year for which such election is made: Calendar Year                     .
	 
	4.	 	The restrictions to which the property is subject:
	 
	 	 	The Shares are subject to forfeiture to the Company for no consideration should
Participant’s employment with the Company terminate or should other specified events occur.
Shares vest only upon the passage of time. Upon any transfer by Participant, the Shares
will be subject to the same restrictions.





 
Section 83(b) Election




 









 









	5.	 	The fair market value on ________________, 20___, of the property with respect to which the election is being
made, determined without regard to any lapse restrictions: $____________.
	 
	6.	 	The amount paid for such property: $_________________________.
	 
	7.	 	A copy of this election has been furnished to the Secretary of the Company pursuant to Treasury
Regulations Section 1.83-2(e)(7).





	 	 	 	 	 
	 

	 	
 
Signature
	 	 
	 

	 	Print Name: 
	 	 
	 
	 	 	 	 
	 

	 	 
Date	 	 






 
Section 83(b) Election