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EXHIBIT 4.14

FIRST INTERSTATE BANCSYSTEM, INC.

2006 EQUITY COMPENSATION PLAN

SECTION 1

ESTABLISHMENT AND PURPOSES

     1.1 Establishment. First Interstate BancSystem, Inc., a Montana corporation
(“FIBS”), maintains various equity compensation plans for the benefit of certain of its
Directors, Officers and Employees, as defined below (collectively, “Key Personnel”). In
adopting this FIRST INTERSTATE BANCSYSTEM, INC. 2006 EQUITY COMPENSATION PLAN (the “Plan”), FIBS
(i) consolidates into one (1) plan the benefits available under the following existing equity
compensation plans: (A) the First Interstate BancSystem, Inc. 2001 Stock Option Plan; (B) the First
Interstate BancSystem, Inc. 2004 Restricted Stock Benefit Plan; (C) the Director Stock Compensation
Plan; and (D) the Officer Stock Benefit Plan, and (ii) provides additional benefits as set forth in
the Plan.

     1.2 Purpose. FIBS adopts the Plan to (i) establish incentives designed to recognize,
reward, and retain Key Personnel who contribute to the success of the “Company” (defined below),
(ii) promote increased ownership of “Common Stock” (defined below) among Key Personnel, (iii)
stimulate Key Personnel to take a more active interest in the development and financial success of
the Company, and (iv) encourage Key Personnel to identify with shareholders of FIBS through Common
Stock ownership.

SECTION 2

DEFINITIONS

     The following terms shall have the following meanings when used in this Plan:

     2.1 Benefit. The term “Benefit” means any one (1) or more of the following
equity compensation benefits available hereunder: “Stock Option Benefit” (defined below),
“Restricted Stock Benefit” (defined below), “Director Stock Benefit” (defined below), or “Officer
Stock Benefit” (defined below).

     2.2 Board. The term “Board” means the board of directors of FIBS.

     2.3 Change of Control. The term “Change of Control” is defined in Section
7.5.

     2.4 Code. The term “Code” means the Internal Revenue Code of 1986, as
amended.

     2.5 Committee. The term “Committee” means the compensation committee of the
Board, or any other committee that the Board authorizes to administer the Plan in whole or in part.

     2.6 Common Stock. The term “Common Stock” means common stock of FIBS.

     2.7 Company. The term “Company” means FIBS and all of its Subsidiaries.

     2.8 Determination Date. The term “Determination Date” is defined in Section
2.14.

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     2.9 Director. The term “Director” means a member of the Board, or a member of
any board of directors of a Subsidiary.

     2.10 Director Stock Benefit. The term “Director Stock Benefit” means the
Benefit available under Section 5.

     2.11 Dissolution or Dissolved. The terms “Dissolution” or “Dissolved”
mean the dissolution or liquidation of FIBS.

     2.12 Employee. The term “Employee” means any person that the Company employs
who receives a regular salary from the Company in respect of such person’s services.

     2.13 Exchange Act. The term “Exchange Act” means the Securities Exchange Act
of 1934, as amended.

     2.14 Fair Market Value. The term “Fair Market Value” means the value of
Common Stock determined on the date that the Board awards the Benefit in accordance with Section
3.3 (the “Determination Date”) as follows:

	 	(a)	 	Listed on Established Stock Exchange. If the Common Stock is listed on any
established stock exchange or a national market system, then the Fair Market Value of
the Common Stock shall equal the closing sales price for the stock (or the closing bid
if no sales were reported) as quoted on such exchange or system for the last market
trading day preceding the Determination Date, as reported in The Wall Street Journal,
or such other source as the Board deems reliable;
	 
	 	(b)	 	Quoted by Recognized Automated Quotation System. If the price of the Common
Stock is quoted by a recognized automated quotation system, then the Fair Market Value
of the Common Stock shall be the mean between the high and low bid quotations for the
Common Stock on the last market trading day preceding the Determination Date; or
	 
	 	(c)	 	All Other Instances. In the absence of an established market for the Common
Stock, its Fair Market Value shall be determined in good faith by the Board which may,
in its sole discretion, utilize an independent third party to assist with the
determination of the Fair Market Value of the Common Stock, which may take the form of
a periodic appraisal of the Fair Market Value of a share of Common Stock valued as a
minority interest. The appraisal which precedes, and is dated most closely to, the
Determination Date shall be used to determine the Fair Market Value of the Common
Stock.

     2.15
FIBS. The term “FIBS” is defined in Section 1.1.

     2.16
Key Personnel. The term “Key
Personnel” is defined in Section 1.1.

     2.17
Officer. The term “Officer” means any officer of the Company.

     2.18 Officer Stock Benefit. The term “Officer Stock Benefit” means the
Benefit available under Section 6.

     2.19 Participant. The term “Participant” means any person who is designated
by the Board to receive one (1) or more Benefits under this Plan.

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     2.20 Plan. The term “Plan” is defined in Section 1.1.

     2.21 Regulations. The term “Regulations” means the Treasury Regulations, as
amended from time to time, promulgated under the Code.

     2.22 Restricted Stock Benefit. The term “Restricted Stock Benefit” means the
Benefit available under Section 7.

     2.23 Stock Option. The term “Stock Option” means an option for the purchase of Common
Stock granted under a Stock Option Benefit.

     2.24 Stock Option Benefit. The term “Stock Option Benefit” means a Benefit
available under Section 8.

     2.25 Subsidiary. The term “Subsidiary” means any now existing or hereafter
organized or acquired corporation, partnership, limited liability company or other entity, more
than fifty percent (50%) of the issued and outstanding ownership interest in which is owned or
controlled directly or indirectly by the Company.

     2.26 Other Definitions. Certain other terms are defined by the context in which they
appear in the Plan for the first time. Such terms shall have the same meaning where they appear in
the Plan.

SECTION 3

ADMINISTRATION

     3.1 Authority. The Board shall have primary authority to administer the Plan, which
authority shall include, but not be limited to, (i) interpreting the Plan, (ii) amending the Plan,
(iii) taking action on behalf of or pursuant to the Plan, (iv) adopting policies and procedures for
the implementation of the Plan, (v) determining from time to time which, if any, of the Benefits
shall be made available and awarded under the Plan, and establishing the specific terms and
conditions of such Benefits, (vi) providing conditions and assurances deemed necessary or advisable
to protect the interests of the Company and/or the Plan, and (vii) making all other determinations
and taking all other actions necessary or advisable for the administration of the Plan. The
Board’s actions, determinations and interpretations shall be final, binding and conclusive for all
purposes and upon all persons. The Board may not exercise its authority hereunder in any manner
inconsistent with the purposes, terms and conditions herein set forth.

     3.2 Delegation to Committee. The Board may delegate all or any portion of
administration of the Plan to the Committee. If administration is totally delegated to the
Committee, the Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board (and references in this Plan to the Board shall thereafter be to
the Committee, as applicable), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board, and subject to the
provisions of Section 3.4(a). The Board may terminate all or any portion of the Committee’s
authority under the Plan at any time and revest the Board with all or any portion of the
administration of the Plan.

     3.3 Administrative Authority of CEO. The Board may delegate all or any portion of the
administration of the Plan to the Company’s Chief Executive Officer, but only with respect to
Benefits to Participants who are neither (i) subject to Section 16 of the Exchange Act, nor (ii)
“covered employees” within the meaning of Section 162(m) of the Code.

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     3.4 Establishment and Award of Benefits. Benefits under this Plan shall be
established and awarded as follows:

	 	(a)	 	Approving Authority. The Board has authority to establish and award all
Benefits under this Plan. If the Board has delegated to the Committee authority to
establish and award Benefits under this Plan and if the Committee is comprised solely
of two (2) or more members (i) all of whom are “Non-Employee Directors” within the
meaning of Rule 16b-3 (or any successor rule) promulgated under the Exchange Act, and
(ii) “outside directors” within the meaning of Section 1.162-27(e)(3) of the
Regulations, then the Committee may establish and award a Benefit. If the Committee is
not so comprised, then the Committee may recommend to the Board approval of the award
of a Benefit, but the Board must approve the award of such Benefit.
	 
	 	(b)	 	Terms and Conditions of Benefits. The material terms and conditions, if any,
of each proposed Benefit shall be established by the Board and/or Committee, as
applicable, which terms and conditions include, but are not limited to, (i) the number
of shares of Common Stock to be issued or optioned, (ii) the Fair Market Value of such
shares, (iii) the Participants eligible for the Benefit, (iv) the vesting schedule, if
any, (v) the option period, if any, and (vi) the restrictions on the Benefit, if any.

     3.5 Indemnification. FIBS shall indemnify and hold harmless each person who is or was
a member of the Committee or the Board against and from (i) any loss, cost, liability, or expense
that may be imposed upon, or reasonably incurred by such person, in connection with or resulting
from any claim, action, suit, or proceeding to which such person may be a party, or in which such
person may be involved, by reason of any action taken or failure to act under the Plan, and (ii)
all amounts paid by such person in settlement thereof, with the approval of FIBS, or paid by such
person in satisfaction of judgment in any such action, suit, or proceeding against such person,
provided such person shall give FIBS an opportunity, at its own expense, to handle and defend the
action, suit, or proceeding before such person undertakes to handle and defend it on such person’s
own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the articles of incorporation or bylaws
of FIBS, as a matter of law, or otherwise, or any power that FIBS may have to indemnify them or
hold them harmless.

SECTION 4

COMMON STOCK SUBJECT TO PLAN & STOCK RESTRICTIONS

     4.1 Reserved Stock. The initial number of shares of Common Stock to be reserved for
the purpose of granting Benefits under this Plan shall be 750,000.

     4.2 Changes in Common Stock. If FIBS shall at any time change the number of issued
shares of Common Stock without new consideration to FIBS (such as by stock dividend or stock
split), then the total number of shares of Common Stock reserved for issuance under this Plan, and
the number of shares covered by an outstanding Restricted Stock Benefit or Stock Option Benefit
shall be equitably adjusted and the aggregate consideration payable to FIBS in respect of either
Benefit, if any, shall not be changed.

     4.3 No Fractional Shares. FIBS shall not issue fractional shares in connection with
the award of any Benefit or the issuance of any Common Stock hereunder.

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     4.4 Retained Shares. Any Common Stock retained by FIBS pursuant to a Participant’s
tax withholding election made in connection with a Benefit under this Plan shall continue to be
included in the Common Stock available for Benefits under this Plan.

     4.5 Stock Legend. All certificates of Common Stock issued under this Plan shall
contain a legend reciting (i) the restrictions on the sale, transfer or encumbrance of the Common
Stock under applicable federal and state securities laws and under this Plan, and (ii) a statement
that the Common Stock is subject to the then applicable Shareholder’s Agreement of FIBS.

SECTION 5

DIRECTOR STOCK BENEFIT

     5.1 Participant. For purposes of this Section 5, the term “Participant” shall
mean a current member of the Board whom the Board, in its sole discretion, designates from time to
time to receive a Director Stock Benefit hereunder. The Board shall consider factors it deems
pertinent in selecting Participants.

     5.2 Director Stock Benefit. A Director Stock Benefit is an award of Common Stock to a
Participant in respect of services rendered or to be rendered to the Company as a Director, which
award may be subject to whatever amounts, terms and conditions as the Board, in its sole
discretion, establishes from time to time.

SECTION 6

OFFICER STOCK BENEFIT

     6.1 Participant. For purposes of this Section 6, the term “Participant” shall
mean an Officer whom the Board, in its sole discretion, designates from time to time to receive an
Officer Stock Benefit hereunder. The Board shall consider factors it deems pertinent in selecting
Participants.

     6.2 Officer Stock Benefit. An Officer Stock Benefit is an award of Common Stock to a
Participant in respect of services rendered or to be rendered to the Company as an Officer, which
award may be subject to whatever amounts, terms and conditions as the Board, in its sole
discretion, establishes from time to time.

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SECTION 7

RESTRICTED STOCK BENEFIT

     7.1 Participant. For purposes of this Section 7, the term “Participant” shall
mean a Director, Officer or Employee of the Company whom the Board, in its sole discretion,
designates from time to time to receive a Restricted Stock Benefit hereunder. The Board shall
consider factors it deems pertinent in selecting Participants.

     7.2 Restricted Stock Benefit. A Restricted Stock Benefit is an award of Common Stock
to a Participant, without payment therefor, as additional compensation in respect of the
Participant’s provision of services, either past or future, to the Company. Each Restricted Stock
Benefit shall be made pursuant to a written agreement between FIBS and the Participant.

     7.3 Restrictions. Restricted Stock Benefits shall be in such amounts and subject to
such terms and conditions as the Board, in its sole discretion, establishes from time to time,
including, without limitation, (i) restrictions on the sale or other disposition of the Common
Stock, (ii) restrictions requiring the forfeiture of Common Stock to FIBS upon termination of the
Participant’s employment or service with the Company prior to satisfying any prescribed vesting
schedule, or (iii) conditions requiring that the Participant earn the Common Stock in whole or in
part upon the achievement of performance goals established by the Board over a specified period of
time. The Board may require (i) the Participant to deliver to FIBS duly executed stock powers,
endorsed in blank, relating to the Common Stock covered by a Restricted Stock Benefit, and/or (ii)
that FIBS hold the stock certificates evidencing the Common Stock until the restrictions thereon
lapse. The Restricted Stock Benefit shall provide that Participants shall have, with regard to the
shares of Common Stock subject to a Restricted Stock Benefit, all of the rights of holders of
shares of Common Stock of FIBS including the rights to receive dividends and to vote shares.

     7.4 Award Limit. The value of a Restricted Stock Benefit that may be granted to a
Participant under this Plan in any calendar year shall not exceed a Fair Market Value of
$1,000,000.00.

     7.5 Dissolution or Change in Control. 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”), then every Restricted Stock Benefit outstanding hereunder which has not vested shall
vest immediately on the effective date of the Dissolution or Change in Control.

SECTION 8

STOCK OPTION BENEFIT

     8.1 Participant. For purposes of this Section 8, the term “Participant” shall
mean a Director, or Employee of the Company whom the Board, in its sole discretion, designates from
time to time to receive a Stock Option Benefit hereunder. The Board shall consider factors it
deems pertinent in selecting Participants.

     8.2 Stock Option Benefit. A Stock Option Benefit is an award to a Participant of the
option to purchase Common Stock that is awarded in respect of the services that the Participant has
or will provide to the Company, subject to whatever amounts, terms, restrictions, and conditions as
the Board, in its sole discretion, establishes from time to time. Each Stock Option Benefit shall
be made pursuant to a written agreement between FIBS and the Participant.

     8.3 Terms and Conditions. The terms and conditions of all Stock Option Benefits shall
be adopted from time to time by the Board. A copy of the current terms and conditions, which are
subject to amendment, modification and revision, and which are intended as policies in

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accordance with the provisions thereof, are attached to this Plan as Exhibit A and by this
reference incorporated herein.

     8.4 Dissolution, Merger, Consolidation, or Reorganization. If FIBS is Dissolved or if
FIBS is subject to a Change in Control, then every Stock Option outstanding hereunder shall
terminate on the effective date of the Dissolution or Change in Control, but each Participant shall
have the right, within ten (10) calendar days immediately prior to the effective date of such
Dissolution or Change in Control, to exercise any unexercised Stock Options whether or not then
exercisable or vested, subject to the provisions of this Plan. Notwithstanding the foregoing, all
Stock Options shall not become immediately exercisable or vested where the surviving corporation in
a Change in Control agrees to issue to each Participant an Option (the “New Option”) to purchase
the surviving corporation’s shares on terms and conditions both as to number of shares and
otherwise, which will substantially preserve to each Participant the rights and benefits of the
Stock Options outstanding hereunder, and in that circumstance, all Participants shall be obligated
to accept the New Options in place of the Stock Options outstanding hereunder, which shall
terminate. The Board shall have sole and absolute discretion to determine whether the Participants
have been offered a New Option which will substantially preserve to the Participant the rights and
benefits of the Stock Options outstanding hereunder.

SECTION 9

ADDITIONAL BENEFITS

     The Board may from time to time, in its sole discretion, establish and award additional
benefits of any type to Officers, Directors, Employees, or others having a relationship of any kind
with the Company. The terms and conditions of any such additional benefits shall, upon adoption,
together with all amendments or restatements, be attached to this Plan as Exhibit B, and such terms
and conditions are incorporated herein.

SECTION 10

GENERAL TERMS AND CONDITIONS APPLICABLE TO BENEFITS

     10.1 No Effect on Relationship. A Participant’s right, if any, to continue to serve
the Company as an Officer, Director, Employee, or otherwise, shall not be enlarged or otherwise
affected by his or her designation as a Participant under this Plan, nor shall this Plan in any way
interfere with the right of the Company, subject to the terms of any separate employment agreement
to the contrary, at any time to terminate the employment or other relationship of a Participant, or
to increase or decrease the compensation of a Participant from the rate in existence at the time of
the grant of a Benefit hereunder.

     10.2 Withholding. All payments or distributions made pursuant to this Plan shall be
net of any amounts required to be withheld pursuant to applicable federal, state and local tax
withholding requirements (“Required Withholding”). If FIBS proposes or is required to
distribute Common Stock pursuant to this Plan, it may require the recipient to remit to FIBS an
amount sufficient to satisfy such Required Withholding before delivery of any certificates for such
Common Stock. The Board may, in its discretion, permit a Participant receiving a Benefit to pay
all or a portion of the Required

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Withholding arising in connection with the receipt or vesting of a Benefit by electing to have
FIBS withhold shares of Common Stock having a Fair Market Value equal to the amount designated by
the Participant to be withheld.

     10.3 Multiple Benefits. A Participant may receive Benefits under any one (1) or more
Sections of this Plan.

     10.4 No Presumption of Future Benefits. The designation of a Participant in any year
to receive a Benefit hereunder shall not require the Board to (i) award Benefits to such person in
any other year or, (ii) award the same type or amount of Benefits that such Participant has
received in prior years.

     10.5 Non-transferability. Unless otherwise provided in writing, a Participant may not
transfer a Restricted Stock Benefit or Stock Option Benefit granted hereunder.

     10.6 Shareholder Agreement. A Participant awarded a Benefit under this Plan may not
receive Common Stock until such Participant executes the applicable Shareholder’s Agreement then in
use by FIBS, restricting the sale, transfer or encumbrance of the Common Stock. A true and correct
copy of the current form of FIBS Shareholder Agreement for non-Scott family shareholders is
attached hereto as Exhibit C.

     10.7 Other Provisions. Benefits under this Plan may be subject to such other
provisions (whether or not applicable to a Benefit granted to any other Participant) as the Board
determines appropriate, including without limitation, provisions for (i) accelerating or
terminating Benefits, (ii) the forfeiture of Common Stock, (iii) restricting the resale or other
disposition of Common Stock, (iv) compliance with federal and state securities laws, or (v)
memorializing understandings or conditions as to the Participant’s employment in addition to those
specifically provided for under this Plan.

     10.8 Rights of FIBS. The award or existence of any Benefits under this Plan shall not
affect in any way the right or power of FIBS or its directors or shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in FIBS’s capital
structure or its business, or any merger or consolidation of FIBS, or any issue of bonds,
debentures, preferred or other securities with preference ahead of or convertible into, or
otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of
FIBS, or any sale or transfer of all or any part of the assets or business of FIBS, or any other
act or proceeding, whether of a similar character or otherwise.

     10.9 Termination of Participant for Cause/Violation of Duty or Contractual Obligation.
Notwithstanding any other provisions of this Plan, if a Participant (a) is discharged from
employment with the Company for cause, (b) is removed as a Director prior to expiration of the
Participant’s term in office, (c) breaches any duty owed to the Company; (d) is convicted of a
felony, or (e) breaches, defaults under, or violates any contract or agreement with the Company,
then except as may be otherwise determined by the Board in its sole discretion, any and all
existing unvested Restricted Stock Benefits and Stock Option Benefits held by such Participant
shall fully and automatically terminate. As used in this Section 10.9, the term “good cause” means
reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job
duties, disruption of the employer’s operation, or other legitimate business reason.

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SECTION 11

SHAREHOLDER APPROVAL AND FILING WITH SEC

     11.1 Shareholder Approval. FIBS shall submit this Plan for approval and
ratification by the shareholders of FIBS at the next regular or special meeting of the shareholders
to be held following approval and adoption of this Plan by the Board. The granting and awarding of
Benefits under this Plan are neither conditioned upon nor subject to such shareholder approval and
ratification unless specifically established otherwise by the Board at the time of approval and
adoption of this Plan.

     11.2 SEC Registration. FIBS shall file a Registration Statement on Form S-8 (or
any successor registration statement) with the Securities and Exchange Commission in order to
register the securities of FIBS now or hereafter subject to and covered by this Plan under the
Securities Act of 1933, as amended. Such filing shall be made at such time as FIBS, in
consultation with legal counsel, shall deem appropriate in accordance with applicable federal and
state securities laws.

SECTION 12

MISCELLANEOUS PROVISIONS

     12.1 Duration, Amendment and Termination. This Plan shall continue in effect until
terminated by the Board. By mutual agreement between FIBS and a Participant under this Plan or
under any other present or future plan of FIBS, Benefits may be granted to a Participant in
substitution and exchange for, and in cancellation of, any prior Benefits previously awarded to a
Participant under this Plan or any other present or future plan of FIBS. The Board may amend this
Plan from time to time or terminate this Plan at any time, subject to any requirement of
shareholder approval required by applicable law, regulation, or rule. No action authorized by this
Section 12.1 shall reduce the amount of any outstanding Benefits or adversely change the terms or
conditions thereof without the affected Participant’s consent.

     12.2 Gender and Number. Except when otherwise indicated by the context, any masculine
terminology used in this Plan also shall include the feminine gender, and the definition of any
term herein in the singular also shall include the plural, and vice versa.

     12.3 Headings. The headings used herein are for convenience only, and shall not be
construed as a part of this Agreement or as a limitation on the scope of the particular paragraphs
to which they refer.

     12.4 Governing Law. This Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Montana, regardless of the law
that might otherwise govern under applicable Montana conflict of laws principles.

     12.5 Severability. In the event that any term or provision of this Agreement shall be
finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to
applicable law by a governmental authority having jurisdiction, that determination shall not impair
or otherwise affect the validity, legality or enforceability, to the maximum extent permissible by
law, of the remaining terms and provisions of this Agreement, which shall be enforced as if the
unenforceable term or provision were deleted.

     12.6 Inconsistency. If there is any inconsistency between an agreement issued
pursuant to this Plan and the Plan, the terms and provisions of the Plan shall prevail.

     12.7 Effective Date of Plan. This Plan shall be effective on the date the Plan is
approved and ratified by the shareholders of FIBS at a duly convened meeting, following approval by
the Board.

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CERTIFICATION

     The undersigned duly elected and acting Secretary of First Interstate BancSystem, Inc.
(“FIBS”) hereby certifies that the foregoing 2006 Equity Compensation Plan (“Plan”) was duly
approved and adopted by the Board of Directors of FIBS on January 26, 2006, subject to approval and
ratification by the shareholders of FIBS pursuant to which the effective date of the Plan shall be
the date of such shareholder approval and ratification. The Plan was duly approved and ratified by
vote of the shareholders of FIBS at a duly called and convened meeting held on May 5, 2006.

	 	 	 	 	 
	 

	 	     /s/ CAROL STEPHENS DONALDSON
      

Carol Stephens Donaldson, Secretary
	 	 

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EXHIBIT A

TERMS AND CONDITIONS OF FIBS 

2006___STOCK OPTION BENEFIT

     Section 1. Establishment. First Interstate BancSystem, Inc., a Montana corporation
(“FIBS”), hereby establishes a stock option benefit for Directors and Employees of the Company,
which shall be known as the “FIRST INTERSTATE BANCSYSTEM, INC. 2006 STOCK OPTION BENEFIT”
(hereinafter called the “Stock Option Benefit”). It is intended that the options issued pursuant
to this Stock Option Benefit will constitute nonqualified stock options for purposes of the
Internal Revenue Code. This Stock Option Benefit (i) is established by FIBS pursuant to the First
Interstate BancSystem, Inc. 2006 Equity Compensation Plan (the “Plan”), (ii) shall be subject to
the terms and conditions of the Plan, and (iii) shall be subject to amendment, modification and
revision from time to time by the Board, in its sole discretion, it being specifically intended
that, notwithstanding any provision hereof, the terms and conditions set forth herein shall be
interpreted as policies to be followed unless otherwise determined by the Board, and that all such
terms and conditions shall not operate to limit or restrict the Board’s plenary power and authority
hereunder to make amendments, modifications and revisions hereto from time to time.

     Section 2. Definitions.

	 	2.1	 	Definitions from Plan. Except as specifically defined herein, all
defined terms used herein shall have the definitions set forth in the Plan.
	 
	 	2.2	 	Date of Exercise. “Date of Exercise” means the date FIBS receives
notice from a Participant of the exercise of an Option pursuant to this Stock Option
Benefit. Such notice shall state the number of shares of Common Stock the Participant
intends to purchase by exercising the Option.
	 
	 	2.3	 	Extended Option Exercise Period. “Extended Option Exercise Period” is
defined in Section 4.5(b).
	 
	 	2.4	 	Mature Shares. “Mature Shares” means shares of Common Stock which have
been owned by the Participant for more than six months and one day.
	 
	 	2.5	 	Option. “Option” means the right to purchase Common Stock under this
Stock Option Benefit at the option price for a specified period of time.
	 
	 	2.6	 	Option Stock. “Option Stock” means Common Stock purchased pursuant to
the exercise of an Option under this Stock Option Benefit.
	 
	 	2.7	 	Participant. “Participant” means a Director, Officer or Employee of
the Company who is designated by the Board to participate in the Stock Option Benefit
and who receives an Option as evidence of this participation.

     Section 3. Grant Limit. A Participant who has been granted an Option may, if
otherwise eligible, be granted additional Options. Notwithstanding the above, the maximum
number of shares of Common Stock that may be subject to Options granted to an individual
Participant under the Stock Option Benefit in any calendar year shall not exceed 350,000 shares.

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     Section 4. Terms of Options

	 	4.1	 	Grant of Options. Options may be granted to Participants at any time
and from time to time as shall be determined by the Board. The Board shall have
complete discretion in determining the number of Options granted to each Participant
and the terms of such Options. In making such determinations, the Board may take into
account the nature of services rendered or to be rendered by such Participant, the
Participant’s present and potential contributions to the Company, and such other
factors as the Board in its discretion shall deem relevant.
	 
	 	4.2	 	Option Agreement. As determined by the Board on the date of grant,
each Option shall be evidenced by an Option Agreement that shall state that it is a
non-qualified Stock Option, the Option price, the duration of the Option, the number of
            shares of Common Stock to which the Option pertains, the vesting schedule of the
Option, and such other terms and conditions as may be determined from time to time by
the Board.
	 
	 	4.3	 	Option Price. No Option granted pursuant to this Stock Option Benefit
shall have an Option price that is less than the Fair Market Value of Common Stock on
the date the Option is granted, unless otherwise approved by the Board.
	 
	 	4.4	 	Duration of Options. Each Option shall expire at such time as the
Board shall determine at the time of its grant, provided however that no Option shall
be exercisable later than the tenth (10th) anniversary date of the date of
its grant, subject to the terms of Section 7.2 below.
	 
	 	4.5	 	Exercise Period.
	 
	 	(a)	 	Options granted under this Stock Option Benefit shall be exercisable at such
times and shall be subject to such restrictions and conditions as the Board shall in
each instance approve, which need not be the same for all Participants.
	 
	 	(b)	 	The vested portion of Options held by non-Director Participants who satisfy all
of the following conditions may be exercised over a period of three (3) years, but not
beyond the stated termination date of the Option (the “Extended Option Exercise
Period”):

	 	(i)	 	the Participant’s employment by the Company has terminated due
to retirement or resignation;
	 
	 	(ii)	 	the total of the age of the Participant and the “time in
service” of the Participant must total at least 70 at the time of the first
exercise of the Option; “time in service” is defined as that period of time,
which need not be continuous, during which the Participant has been employed by
the Company or for which the Participant has been given credit by the
Committee; and
	 
	 	(iii)	 	during the Extended Option Exercise Period, the Participant is
not employed by a person or entity, other than the Company, which is engaged in
the business of banking, financial services, securities or insurance brokerage,
or other business conducted by the Company.

15

 

The Extended Option Exercise Period begins on the date of the Participant’s
retirement or resignation from employment with the Company.

	 	(c)	 	The provisions of Section 7 shall govern the time period for exercise of the
vested portion of an Option where the Participant’s relationship with the Company has
terminated.
	 
	 	(d)	 	If the Company determines that a Participant has engaged in Competition with
the Company, which determination by the Company shall be final and conclusive, the
Participant must exercise the vested portion of the Option, if at all, within thirty
(30) days after written notice from the Company to the Participant. “Competition”
means that a Participant has become an officer, director, shareholder, member, partner,
employee, or independent contractor of, or has established any other relationship with,
a Competitor of the Company. “Competitor” means a bank, credit union, savings bank,
stock brokerage firm, insurance company or producer, trust services provider, mortgage
lender or broker, credit provider, escrow services provider, data technology services
provider, banking item processing service provider, or any other business providing
goods or services provided by the Company or any of its subsidiaries or affiliates now
or at any time in the future relevant to any provisions of this Agreement in any market
area served by the Company or any of its subsidiaries or affiliates or in which the
Company or any of its subsidiaries or affiliates is soliciting business.
	 
	 	4.6	 	Payment. Upon exercise of any Option, the Option price shall be
payable to the Company in full either: (i) in cash or its equivalent, (ii) by tendering
Mature Shares having a Fair Market Value at the time of exercise equal to the Option
price, (iii) by any combination of (i) and/or (ii), or (iv) by any other method
acceptable to the Board in its discretion. The proceeds from exercise of an Option
shall be added to the general funds of FIBS and shall be used for its corporate
purposes.

     Section 5. Exercise of Option. 

	 	5.1	 	Written Notice. An Option may be exercised by written notice to FIBS,
in the form and manner prescribed by the Board, given by (i) the Participant, (ii) the
Participant’s guardian or conservator if one has been appointed for the Participant,
(iii) the Participant’s personal representative if the Participant is deceased, or (iv)
a transferee authorized by the terms of Section 8. Full payment for the Option Stock
to be purchased pursuant to exercise of the Option must accompany the written notice.
	 
	 	5.2	 	Issuance of Stock Certificates. As soon as practicable after (i) the
receipt of written notice of exercise of an Option, (ii) payment for the Option Stock
being purchased, including any payment required under Section 5.3, (iii) execution of
the Shareholder’s Agreement referred to in Section 6.1, and (iv) satisfaction of any
other conditions adopted by the Board, FIBS shall, without stock issue or transfer
taxes, deliver to the Participant a stock certificate for the number of shares of
Option Stock purchased by exercise of the Option.
	 
	 	5.3.	 	Tax Withholding. Whenever shares of Common Stock are to be issued in
satisfaction of Options exercised under this Plan, FIBS shall have the power to require
the recipient of the Common Stock to pay to FIBS an amount sufficient to

16

 

	 	 	 	satisfy FIBS’s minimum statutorily required federal, state, and local withholding
tax requirements, as determined by FIBS. The Committee, at its option, may allow
the recipient of the Common Stock to tender Mature Shares and/or Option Stock to
FIBS in payment of FIBS’s minimum withholding tax requirements of this Section 5.3.

     Section 6. Restrictions on Stock Transferability.

	 	6.1	 	Shareholder Agreement. The issuance of Option Stock is expressly
conditioned upon execution by the Participant receiving the Option Stock of the
applicable Shareholder’s Agreement then in use by FIBS, restricting the sale, transfer
or encumbrance of the Option Stock.
	 
	 	6.2	 	Holding Period. Option Stock may not be sold or transferred to FIBS or
any other person or entity for a period of six (6) months and one day following
acquisition of the Option Stock by a Participant. This restriction shall attach to the
Option Stock when issued.
	 
	 	6.3	 	Other Restrictions. The Board may impose such other restrictions on any
Option Stock as it may deem advisable including, without limitation, restrictions under
applicable blue sky and federal securities laws.

     Section 7. Termination of Relationship with Company.

	 	7.1	 	Non-Director Participants.

7.1.1 Termination of Employment Due to Death. If the employment of a
non-Director Participant with the Company terminates by reason of death, the duly
appointed personal representative of the estate of such Participant shall have one
hundred eighty (180) days after the date of death of such Participant in which to
exercise all vested portions of all Options held by such Participant regardless of
whether the Options would otherwise expire prior to the end of the 180-day period
and regardless of whether the Options are not otherwise exercisable within that
180-day period, provided however, that if such Participant, as of the date of death,
is eligible for the Extended Option Exercise Period set forth in Section 4.5(b)
above (for purposes of determining eligibility, such Participant’s death shall be
deemed to satisfy the condition stated in Section 4.5(b)(i) above), the personal
representative of such deceased Participant’s estate may exercise those portions of
such Participant’s Options which are vested at the date of such Participant’s death
over the Extended Option Exercise Period. Any Options of such deceased Participant
which are not exercised within the period stated in the preceding sentence shall
expire and terminate.

7.1.2 Termination of Employment Other Than for Death. If the employment of
a non-Director Participant with the Company is terminated for any reason other than
death, including but not limited to retirement, resignation or discharge, all vested
portions of Options of the terminated non-Director Participant shall be exercisable
at any time prior to the expiration date of each Option or within ninety (90) days
after the date of termination of employment, whichever period is shorter, except as
provided in Section 4.5(b) above. Any Options of the terminated non-Director
Participant which are not exercised within the period stated in the preceding
sentence shall expire and terminate.

17

 

7.1.3 Transfer or Leave of Absence. For purposes of Section 7.1.2 above,
neither of the following shall be deemed a termination of the employment of a
non-Director Participant:

	 	(a)	 	A transfer of a non-Director Participant from FIBS to a
Subsidiary or vice versa, or from one Subsidiary to another Subsidiary, or
	 
	 	(b)	 	A leave of absence duly authorized by the Company.

	 	7.2	 	Director Participants. If a Director Participant’s status as a
director of FIBS terminates by reason of death, resignation, or removal, all Options
held by such Participant must be exercised, if at all, within one hundred eighty (180)
days after the date of the Participant’s death or the date of the resignation or
removal of the Participant as a director of FIBS, as applicable, regardless of whether
the Options would otherwise expire prior to the end of the 180-day period and
regardless of whether the Options are not otherwise exercisable within that 180-day
period. Any Options of the Participant which are not exercised within the period
stated in the preceding sentence shall expire and terminate.

     Section 8. Transferability of Options. An Option shall not be transferred except by
will or by the laws of descent and distribution. Notwithstanding the above, the Board may, in its
sole discretion, permit the transfer, whether gratuitous or for consideration, of some or all of
the Participant’s rights to an Option in connection with certain personal and estate tax planning
transactions of the Participant that are approved by the Board. Transfer may be conditioned on the
Participant’s execution of an indemnification agreement with FIBS in a form and manner prescribed
by the Board for all claims arising in connection with the transfer, or on any other condition
prescribed by the Board. No Option shall be subject to execution, attachment, or similar process.

18

 

EXHIBIT B

TERMS AND CONDITIONS OF ADDITIONAL BENEFITS

[Add whenever additional Benefits are created or awarded by the Board.]

19

 

EXHIBIT C

FORM OF SHAREHOLDERS’ AGREEMENT

SHAREHOLDER’S AGREEMENT

     THIS AGREEMENT is made this                      day of                     , 2___, by and between
                    , herein referred to as “Shareholder”, and FIRST INTERSTATE BANCSYSTEM, INC., a
Montana corporation, 401 North 31st Street, Billings, Montana 59101, herein referred to as the
“Corporation”.

RECITALS:

     A. Shareholder owns capital stock of the Corporation, which together with any additional stock
hereafter acquired by Shareholder, except for stock acquired from the Savings Plan (as defined
herein) is referred to herein as the “Stock”.

     B. The Corporation desires to restrict the issuance and holding of its corporate stock to
officers, directors, including advisory directors and any other classification or designation of
directors hereafter made by the Corporation, and employees of the Corporation or any of its
subsidiaries, and to fiduciaries for the benefit of any such persons, to charities, and to such
other persons as the Corporation may permit.

     C. The Corporation and Shareholder make this Agreement to set forth the restrictions on the
Stock.

     NOW, THEREFORE, in consideration of the above facts and the Shareholder’s and the
Corporation’s mutual promises herein, the Shareholder and the Corporation agree as follows:

     1. Definitions. The following definitions shall apply to this Agreement:

	 	(a)	 	“Call Right” means the call right of the Corporation
described in paragraph 4.2.
	 
	 	(b)	 	“Charity” is defined in paragraph 3.
	 
	 	(c)	 	“Code” is defined in paragraph 3.
	 
	 	(d)	 	“Competitor” means a bank, credit union, savings bank, stock
brokerage firm, insurance company or producer, trust services provider,
mortgage lender or broker, credit provider, escrow services provider, data
technology services provider, banking item processing service provider, or any
other business providing goods or services provided by the Corporation or any
of its subsidiaries or affiliates now or at any time in the future relevant to
any provisions of this Agreement in any market area served by the Corporation
or any of its subsidiaries or affiliates or in which the Corporation or any of
its subsidiaries or affiliates is soliciting business.
	 
	 	(e)	 	“Corporation” is defined in the opening paragraph of this
Agreement.
	 
	 	(f)	 	“Fair Market Value” is defined in paragraph 9.1.

20

 

	 	(g)	 	“Purchase Right” means the Right of First Refusal or the Call
Right.
	 
	 	(h)	 	“Right of First Refusal” is defined in paragraph 4.1.
	 
	 	(i)	 	“Savings Plan” means the Savings and Profit Sharing Plan For
Employees of First Interstate BancSystem, Inc., as amended from time to time.
	 
	 	(j)	 	“Shareholder’s Relationship with the Corporation” means any
employment or other service relationship of the Shareholder with the
Corporation or any of its subsidiaries or affiliates including but not limited
to being an employee, member, partner, officer, director, advisory director,
and any other classification or designation of officers or directors hereafter
made by the Corporation or any of its subsidiaries or affiliates.
	 
	 	(k)	 	“Stock” is defined in Recital paragraph A.
	 
	 	(l)	 	“Termination” means the end of a Shareholder’s Relationship
with the Corporation or any of its subsidiaries or affiliates whether by
resignation, death, termination, or otherwise.

     2. Restriction on Transfer or Pledge of Stock. Except as otherwise provided in this
Agreement or as agreed upon in writing by the Shareholder and the Corporation, Shareholder shall
not transfer or permit to be transferred, whether voluntarily, involuntarily or by operation of
law, resulting from death or otherwise, any or all of the Stock, and any attempted transfer in
violation of this Agreement shall be void. Shareholder shall not encumber or use any Stock as
security for a loan, except upon the written consent of the Corporation and subject to the
Corporation’s rights herein. Under no circumstances, including but not limited to the provisions
of paragraphs 3 and 4.1 below, may a Shareholder who has acquired Stock under any stock option plan
now existing or hereafter adopted by the Corporation transfer, attempt to transfer, or permit the
transfer of any of the Stock so acquired for a period of six (6) months following the date of
acquisition of such Stock. The certificate for the Stock shall contain the restrictive legends
provided in this Agreement, unless otherwise agreed in writing by the Corporation.

     3. Transfer of Stock to Charity. A Shareholder may transfer Stock to any organization
described in Section 170(b)(1)(A) of the Internal Revenue Code of 1986, as now or hereafter amended
(the “Code”), a gift to which qualifies as a charitable deduction under Sections 170(c), 2055(a),
or 2522(a) of the Code (a “Charity”). Stock transferred to a Charity shall be subject to the terms
of this Agreement, except for the provisions of paragraph 4.2.1, and the Charity shall be included
in the definition of “Shareholder” herein. The certificate issued to the Charity for the Stock
shall contain the restrictive legends required by this Agreement.

     4. Corporation Stock Purchase Rights.

     4.1 Right of First Refusal. If Shareholder desires to sell or transfer any Stock,
Shareholder shall give written notice of such desire to the Corporation in the form of Exhibit A
attached hereto. If other than by reason of Shareholder’s death, any of Shareholder’s Stock is
transferred by operation of law to any person other than the Corporation (such as, but not limited
to, Shareholder’s trustee in bankruptcy, a purchaser at any execution sale, or the guardian or
conservator of Shareholder), Shareholder or Shareholder’s guardian or conservator, as the case may
be, shall immediately give written notice to the Corporation of the transfer. Unless the proposed
sale or transfer of stock is agreed upon in writing between the Corporation and Shareholder
pursuant to paragraph 2, then within one hundred ninety (190) days after the Corporation’s receipt
of any notice referred to in this paragraph, the Corporation may exercise its right to purchase all
but not less than all of the Stock desired to be sold or transferred by

21

 

Shareholder or involuntarily transferred (the “Right of First Refusal), upon the terms set
forth in this Agreement.

     4.2 Call Right.

     4.2.1 Call Right on Termination of Relationship. Upon Termination of Shareholder’s
Relationship with the Corporation, the Corporation shall have the right, but not the obligation, to
purchase all or any portion of Shareholder’s Stock (the “Call Right”) on or after that date which
is four (4) years after the date of Termination, on the terms set forth in this Agreement, subject
to the following qualifications:

	 	(i)	 	If Shareholder becomes an officer, director, shareholder,
member, partner, employee, or independent contractor of, or establishes any
other relationship with, a Competitor of the Corporation, as determined by the
Corporation, which determination shall be conclusive and irrefutable, then the
Call Right shall be accelerated and the Corporation may exercise its Call Right
at any time thereafter;
	 
	 	(ii)	 	If Shareholder owns less than 1,000 shares of stock, then the
Corporation may exercise its Call Right at any time after one year following
Termination of Shareholder’s Relationship with the Corporation;
	 
	 	(iii)	 	If Shareholder’s service as an employee, officer, or director
of the Corporation or any of its subsidiaries or affiliates ends and
Shareholder at any time thereafter becomes an advisory director of the
Corporation or any of its subsidiaries or affiliates, the Corporation may, at
its option, exercise its Call Right as to any or all of Shareholder’s Stock
over and above 5,000 shares at any time after four years following the date on
which Shareholder becomes an advisory director. When Shareholder’s service as
an advisory director ends, the Corporation may exercise its Call Right as to
any or all of Shareholder’s Stock at any time after four years following
termination.

     4.2.2 Call Right on Permitted Stock Transfers. If any Stock is transferred by the
Shareholder to a Charity or any other person or party with the written consent of the Corporation,
the Corporation shall have the right to exercise its Call Right for such Stock at any time after
such transfer.

     4.2.3 General Call Right. In all circumstances other than those addressed in
paragraphs 4.2.1 and 4.2.2 above, the Corporation shall have the right to exercise its Call Right
for the Stock at any time.

     4.2.4 Call Right Following Death of Shareholder. Upon Shareholder’s death, the
personal representative of the Shareholder’s estate may distribute the Stock to the Shareholder’s
beneficiaries subject to all terms and provisions of this Agreement, including but not limited to
the Right of First Refusal and the Call Right. Each beneficiary of the deceased Shareholder who
receives Stock shall be included in the definition of “Shareholder” herein. If a Termination of
the Shareholder’s Relationship with the Corporation has occurred prior to the Shareholder’s death
so that the Call Right time period has begun to run under paragraph 4.2.1., the time period shall
continue to run and shall not start anew because of the Shareholder’s death, provided however, that
the Call Right may not be exercised by the Corporation prior to one year after the date of
Shareholder’s death. Shareholder, by signing this Agreement, directs Shareholder’s personal
representative to open Shareholder’s estate promptly in the court of proper jurisdiction, to notify
the Corporation in writing of the opening of the estate, to provide the Corporation

22

 

information concerning the proposed distribution of Stock through the estate, and to cooperate
with the Corporation to effectuate the terms and provisions of this Agreement.

     5. Acquisition of Additional Stock. If Shareholder acquires additional Stock, whether
through the exercise of stock options or otherwise during the term of this Agreement, the
Corporation shall have all rights set forth in this Agreement with regard to such additional Stock,
including but not limited to the Call Right and Right of First Refusal set forth in paragraph 4.
If a Termination of the Shareholder’s Relationship with the Corporation has occurred prior to the
Shareholder’s acquisition of additional Stock so that the Call Right period has begun to run under
paragraph 4.2.1, the Call Right time period shall continue to run and shall include the additional
Stock, and shall not start anew with respect to the additional Stock.

     6. Capital Adjustments to Stock. If there is any change in the Stock by reason of a
stock dividend or split, reorganization, recapitalization, reclassification, merger, consolidation,
combination, or exchange of shares or other similar corporate change, the aggregate number of
shares of Stock referred to in any provision of this Agreement shall be appropriately adjusted by
the Corporation, whose determination shall be conclusive, provided, however, that fractional shares
shall be rounded up to the nearest whole share. No adjustment shall be made in connection with the
issuance by the Corporation of any warrants, rights, or options to acquire additional shares of
corporate stock or of securities convertible into corporate stock.

     7. Exercise of Purchase Right. The Corporation shall exercise any Purchase Right
granted in this Agreement by delivering written notice of its exercise of the Purchase Right,
within any time period required hereunder, to the Shareholder, or to the personal representative of
Shareholder’s estate if the Shareholder is deceased.

     8. Effect of Consent to Transfer Stock or Non-Exercise of Right of First Refusal. If
the Corporation consents in writing to Shareholder’s transfer of any or all of the Stock and/or if
the Corporation waives or fails to exercise its Right of First Refusal on any or all of the Stock,
then the Stock may be transferred subject to the terms, conditions, and limitations of this
Agreement (except for the provisions of paragraph 4.2.1, which shall be inapplicable), and the
transferee shall be included in the definition of “Shareholder” herein.

     9. Purchase Price for Shares.

     9.1 Determination of Purchase Price. The purchase price for each share of Stock
purchased pursuant to any Purchase Right granted in this Agreement shall be the Fair Market Value
of the Stock . “Fair Market Value” means, as of any date, the value of a share of Stock determined
as follows:

	 	(i)	 	If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean between the high bid and the low asked prices for the Stock on the last
market trading day prior to the date of determination; or
	 
	 	(ii)	 	In the absence of an established market for the Stock, its Fair
Market Value shall be determined in good faith by the Corporation’s board of
directors which may, in its sole discretion, utilize an independent third party
to assist with the determination of the Fair Market Value of the Stock, which
may take the form of a periodic appraisal of the Fair Market Value of a share
of Stock valued as a minority interest.

     9.2 Payment of the Purchase Price. The purchase price for Stock to be purchased by
the Corporation pursuant to this Agreement shall be paid in cash at the closing of the purchase

23

 

of the Stock. The Corporation may, at its option, withhold any amount for which the
Shareholder is obligated to the Corporation or its subsidiaries from the amount of the purchase
price payable to Shareholder and apply said amount to such obligation.

     10. The Closing.

     10.1 Time and Place. Unless otherwise agreed by the parties, the closing of the sale
and purchase of Stock, as provided in this Agreement, shall take place at the general offices of
the Corporation within thirty (30) days after the Corporation’s exercise of any Purchase Right.

     10.2 Documents. At the closing of the sale and purchase of the Stock, the Corporation
and the Shareholder or other party having an interest in the Stock being purchased hereunder shall
execute and immediately deliver to each other the various documents which shall be required to
carry out their undertakings hereunder, including but not limited to the payment of cash and the
assignment and delivery of stock certificates free and clear of all taxes, debts, claims,
judgments, liens or encumbrances whatsoever.

     11. Legends on Certificates. Certificates representing the Stock shall bear such
legends as may be required by the securities laws of the United States and any applicable state,
and the following legend reciting the existence of this Agreement and restrictions on transfer of
the Stock:

The sale, transfer or encumbrance of the shares of stock represented by
this certificate is subject to an agreement to restrict transfer or
acquisition of the shares. A copy of the agreement is on file in the
office of the secretary of the Corporation. Any transfer or acquisition
in violation of the agreement is null and void.

     12. Reissued Stock. The Corporation shall have the right to substitute or reissue
stock in exchange for the Stock in the event of a stock split, merger, consolidation, name change,
sale, spin off, share exchange, or other corporate reorganization. Substituted or reissued stock
shall be subject to the terms of this Agreement.

     13. Term of Agreement. This Agreement shall be effective so long as Shareholder owns
any Stock or holds any option or other right to acquire any Stock of the Corporation, and this
Agreement shall bind all Stock now owned or hereafter acquired by Shareholder.

     14. Termination.

     14.1 Events Causing Termination. This Agreement and all restrictions on Stock created
hereby shall be effective as of the date hereof and shall terminate on: (a) expiration of the term
of this Agreement, (b) the occurrence of the bankruptcy, receivership or dissolution of the
Corporation, (c) the public trading of the Stock, or (d) the execution of a written instrument by
the Corporation and the party or parties who then own Stock subject to this Agreement which
terminates the same.

     14.2 Survival of Rights and Remedies. The termination of this Agreement for any
reason shall not affect any right or remedy existing hereunder prior to the effective date of
termination hereof.

     15. Remedies. The parties agree that they will not have an adequate remedy at law for
the breach of this Agreement because, among other reasons, the Stock cannot readily be purchased or
sold on the open market. The parties shall have available for any breach of this Agreement the
remedies of specific performance and injunctive relief, together with all other

24

 

remedies at law or in equity. No waiver of or forbearance to enforce any right or provision
hereof shall be binding unless in writing and signed by the party to be bound, and no such waiver
or forbearance in any instance shall apply to any other instance or any other right or provision.

     16. Modification or Termination. This Agreement may not be modified or terminated
orally, and no modification, termination, or amendment shall be valid unless in writing signed by
all parties hereto.

     17. Governing Law. This Agreement shall be governed for all purposes by the laws of
the State of Montana.

     18. Severability. Each term and provision of this Agreement is intended to be
enforced to the maximum extent permitted by applicable law. If any term or provision of this
Agreement or the applicability thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and shall continue in full force and effect.

     19. Stock Held In Savings Plan. This Agreement does not apply to or restrict stock of
the Corporation held in the Savings Plan of the Corporation.

     20. Notices. All notices provided for by this Agreement shall be made in writing and
shall be given either: (1) by actual delivery of the notice to the party entitled thereto; or (2)
by mailing the notice in the U.S. mails, certified mail, return receipt requested to the last known
address of the party entitled thereto. The notice shall be deemed to be received in case (1) on the
date of its actual receipt by a party and in case (2) on the date of its mailing.

     21. Binding Effect. This Agreement is binding upon and inures to the benefit of the
Corporation and the Shareholder and their respective heirs, legal representatives, successors and
assigns.

     22. Time. Time shall be of the essence of this Agreement.

     23. Headings. The headings used herein are for convenience only, and shall not be
construed as a part of this Agreement or as a limitation on the scope of the particular paragraphs
to which they refer.

     24. Entire Agreement. This Agreement contains the entire agreement and understanding
of the parties, and supersedes any and all prior negotiations, understandings, and agreements.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth on page 1.

	 	 	 	 	 	 	 
	 	 	FIRST INTERSTATE BANCSYSTEM, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:
	 	EVP and Chief Financial Officer
 

	 	 
	 

	 	 	 	“Corporation"	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	“Shareholder"	 	 

25

 

EXHIBIT A

NOTICE

	 	 	 
	To:

	 	First Interstate BancSystem, Inc.
	 

	 	401 North 31st Street
	 

	 	Billings, MT 59101

Pursuant to the Shareholder’s Agreement between the undersigned Shareholder and First
Interstate BancSystem, Inc. (“Corporation”), the undersigned hereby gives notice of
Shareholder’s desire to sell or transfer ___ shares
of Corporation common stock to
_______________.

26exv4w15

 

EXHIBIT 4.15

FIRST INTERSTATE BANCSYSTEM, INC.

FORM OF STOCK OPTION AGREEMENT

     This STOCK OPTION AGREEMENT is entered into this ___day of___, 2006, between First
Interstate BancSystem, Inc. (hereinafter referred to as the “Company”) with mailing address at 401
North 31st Street, Billings, Montana 59101, and ___, (hereinafter
referred to as the “Participant”).

     WHEREAS, the Company has established the FIRST INTERSTATE BANCSYSTEM, INC. 2006 STOCK EQUITY
PLAN (hereinafter called the “Plan”). Pursuant to the Plan the Company has adopted the First
Interstate BancSystem, Inc. 2006 Stock Option Benefit (the “Stock Option Benefit”) which permits
non-qualified stock Options to be granted to certain directors and employees of the Company and its
subsidiaries, as determined by the Company; and

     WHEREAS, the Participant is a director or employee of the Company or a subsidiary thereof, and
the Company desires to retain and motivate the Participant and to encourage stock ownership by
providing the Participant with a means to acquire or increase a personal financial interest in the
Company, to stimulate the active interest of the Participant in the development and financial
success of the Company, and to encourage the Participant to identify with shareholders through
stock ownership.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, receipt of which is hereby acknowledged, it is mutually agreed as follows:

	 	1.	 	Defined Terms. All defined terms used in this Agreement shall have
the definitions set forth in the Plan and in the Stock Option Benefit, unless
specifically defined herein. If there is any inconsistency between the defined terms
in the Plan and in the Stock Option Benefit, the defined terms in the Plan shall
govern.
	 
	 	2.	 	Option. The Company hereby grants to the Participant a non-qualified
Option to purchase from the Company, pursuant to the Plan and the Stock Option Benefit
(a copy of which has been provided to the Participant by the Company, and the terms of
which are incorporated herein by reference) and the terms of this Agreement, a total
of                     shares of the common stock, without par value, of the Company (the “Stock”)
at a price of $___ per share. The number of shares and the price per share are
subject to adjustment as provided in the Plan.

The Option is granted to Participant as a (check one):

	 	 	 	 	 
	 

	 	 	 	Employee
	 

	 	 	 	 
	 

	 	 	 	Director
	 

	 	 	 	 

27

 

	 	3.	 	Transferability. The Option shall not be transferred except by will
or by the laws of descent and distribution. Notwithstanding the above, the Company
may, in its sole discretion, permit the transfer, whether gratuitous or for
consideration, of some or all of the Participant’s rights to the Option in connection
with certain personal estate and tax planning transactions of the Participant that are
approved by the Company. Transfer may be conditioned on the Participant’s execution
of an indemnification agreement with the Company in a form and manner prescribed by
the Company for all claims arising in connection with the transfer, or on any other
condition prescribed by the Company. The Option shall not be subject to execution,
attachment, or similar process.
	 
	 	4.	 	Employment. Nothing in this Agreement shall interfere with or limit
in any way the right of the Company or its subsidiaries to terminate Participant’s
employment at any time, nor confer upon any Participant any right to continue in the
employment of the Company or any subsidiary thereof.
	 
	 	5.	 	Vesting of Option. Except as otherwise provided in the Plan or
hereafter in this Section 5:

(a) If the Option is granted to Participant as a Director, the Option for Stock
herein granted is fully vested immediately upon the date of this Agreement; or

(b) If the Option is granted to Participant as an Employee, the Option for the
Stock herein granted shall vest with Participant according to the following
schedule:

25% of the Option vests immediately upon the date of this
Agreement;

Additional 25% of the Option vests on that date which is one
year after the date of this Agreement;

Additional 25% of the Option vests on that date which is two
years after the date of this Agreement;

Option fully vests on that date which is three years after
the date of this Agreement.

If Participant dies before the Option fully vests under the foregoing schedule,
then, notwithstanding the foregoing, the Option, including all previously unvested
portions, shall fully vest on the date of Participant’s death. If Participant’s
employment with the Company terminates before the Option fully vests, then only
that portion of the Option which was vested on the date of termination of
employment of the Participant may be exercised hereunder.

	 	6.	 	Exercise of Option. Participant may exercise the vested portion of
the Option hereby granted at any time during the Exercise Period stated in paragraph 9
below by delivering to the Company, at its address stated in the first paragraph of
this Agreement or such other address as the Company may direct,
written notice specifying the number of shares the Participant then desires to purchase,
together with full payment of the 

28

 

	 	 	 	Option price in either (i) cash or its
equivalent, (ii) by tendering Mature Shares having a Fair Market Value at the time
of tender equal to the Option price, (iii) by any combination of (i) and/or (ii),
or (iv) by any other method acceptable to the Company in its discretion. In
addition, Participant shall also pay to the Company such amount as may be necessary
to satisfy the Company’s minimum statutorily required federal, state and local tax
withholding requirements as determined by the Company.
	 
	 	7.	 	Issuance of Stock. All Stock issued pursuant to the Plan and this
Agreement shall be issued subject to the terms and conditions of that Shareholder’s
Agreement then in use by the Company. Prior to issuance of any Stock pursuant to
exercise of the Option, the Participant, or the heirs or permitted assigns of
Participant if the Option has been transferred, shall execute and deliver to the
Company a Shareholder’s Agreement in the form then in use by the Company, unless such
Shareholder’s Agreement has been previously executed and delivered to the Company
which covers the Stock to be issued hereunder. After satisfaction of this requirement
and after satisfaction of all other conditions under this Agreement, the Plan, and the
Stock Option Benefit, the Company shall issue and deliver a certificate for the number
of shares of Stock purchased pursuant to exercise of the Option, which shall contain
legends referring to the Shareholder’s Agreement and to the restrictions imposed
pursuant to the Plan.
	 
	 	8.	 	Holding Period. Stock acquired through exercise of the Option may
not be transferred in any manner, except as specifically stated in the Plan, for a
period of six (6) months and one day following acquisition of the Stock.
	 
	 	9.	 	Option Exercise Period. The vested portion of the Option must be
exercised by the Participant, if at all, upon the earlier of (i)the expiration of ten
(10) years from the date of this Agreement or (ii) the earliest occurrence of any of
the following (the “Exercise Period”):

	 	(a)	 	If the Option is granted to Participant as an Employee, the
earlier of the expiration date of the Option or the expiration of ninety (90)
days after Participant’s termination of employment with the Company or any of
its subsidiaries or affiliates for a reason other than death, unless
subparagraph (c) below applies; or
	 
	 	(b)	 	If the Options is granted to Participant as an Employee, the
expiration of one hundred eighty (180) days after the date of the
Participant’s death, regardless of whether the Options would otherwise expire
prior to the end of the 180-day period and regardless of whether the Option is
not otherwise exercisable within that period, unless subparagraph (c) below
applies; or
	 
	 	(c)	 	If the Option is granted to Participant as an Employee, the
expiration of the Extended Option Exercise Period if applicable to
Participant; or
	 
	 	(d)	 	If the Option is granted to Participant as a Director, the
expiration of one hundred eighty (180) days after the date of the
Participant’s death or the date of the resignation or removal of the
Participant

29

 

	 	 	 	as a Director, as applicable, regardless of whether the Option
would otherwise expire prior to the end of the 180-day period and regardless
of whether the Option is not otherwise exercisable within that 180-day
period; or
	 
	 	(e)	 	For any Participant, the expiration of thirty (30) days after
written notice from the Company to the Participant that the Participant has
engaged in Competition with the Company, which determination of the Company
shall be final and conclusive. “Competition” means that a Participant has
become an officer, director, shareholder, member, partner, employee, or
independent contractor of, or has established any other relationship with, a
Competitor of the Company. “Competitor” means a bank, credit union, savings
bank, stock brokerage firm, insurance company or producer, trust services
provider, mortgage lender or broker, credit provider, escrow services
provider, data technology services provider, banking item processing service
provider, or any other business providing goods or services provided by the
Company or any of its subsidiaries or affiliates now or at any time in the
future relevant to any provisions of this Agreement in any market area served
by the Company or any of its subsidiaries or affiliates or in which the
Company or any of its subsidiaries or affiliates is soliciting business.

If the Option is not exercised within the Exercise Period, it fully and finally
expires and terminates.

	 	10.	 	Resolution of Disputes. As a condition of the granting of this
Option, the Participant agrees that any dispute or disagreement which may arise under
or as a result of or pursuant to this Agreement shall be resolved in the Thirteenth
Judicial District Court, Yellowstone County, Montana, and shall be final, binding, and
conclusive.
	 
	 	11.	 	Miscellaneous. The Plan and this Agreement shall be construed in
accordance with and governed by the laws of the State of Montana. This Agreement is
binding upon the heirs, personal representatives, and permitted assigns of
Participant. This Agreement may be amended or modified only by written document
executed by both parties hereto. If there is any inconsistency between this Agreement
and the Plan, the terms and provisions of the Plan shall prevail.

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     IN WITNESS WHEREOF, this Option Agreement is executed by the Company and by the Participant as
of the date stated in the first paragraph of this Agreement.

	 	 	 	 	 	 	 
	 

	 	FIRST INTERSTATE BANCSYSTEM, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Its: Executive Vice President & Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	PARTICIPANT:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

31

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