HARLEY-DAVIDSON, INC.

DIRECTOR COMPENSATION POLICY
EFFECTIVE APRIL 29, 2006

        This compensation policy has been developed to compensate non-employee
directors (“Directors”) of Harley-Davidson, Inc. (the “Company”) for their time,
commitment and contributions to the Board of Directors (the “Board”) of the
Company. The Annual Retainer Fee has been increased based on the following:
Directors will no longer receive meeting fees for each Board meeting and
Committee meeting attended; Directors will no longer receive annual grants of
stock options; and the number of meetings of the Directors, particularly
meetings of the Committees of the Board, has increased. It is expected that
Directors will attend all meetings of the Board and of its Committees.

I. Annual Retainer Fee for Non-Employee Directors

Annual Retainer Fee for Non-Employee Directors $100,000 Annual Retainer Fee for
Audit Committee Chair     10,000 Annual Retainer Fee for Other Committee Chairs
      5,000 Annual Retainer Fee for Audit Committee Members       5,000

  The Company may pay an additional fee to a non-executive Chairman of the Board
in an amount determined by the Board from time to time. Annual Retainer Fees
paid to Directors of the Board will be paid within ten (10) business days after
the first business day following the annual meeting of the shareholders of the
Company (“Annual Meeting”). In the event a Director is elected to the Board at a
time other than at the Annual Meeting, the Annual Retainer Fee will be prorated
on a quarterly basis based on the quarter a Director is elected to the Board and
paid within ten (10) business days after the first business day after the
Director’s first Board or committee meeting.

  Directors will be eligible to elect to receive Annual Retainer Fees in cash or
Company Common Stock (based upon the fair market value of the Common Stock on
the first business day after the Annual Meeting or the first business day after
the Director’s first Board or committee meeting) and to defer all Annual
Retainer Fees paid in cash or Company Common Stock pursuant to plans adopted by
the Company from time to time. Directors must receive a minimum of one-half (½)
of their Annual Retainer Fees in Company Common Stock until the Director reaches
the stock ownership goals established in the Director and Senior Executive Stock
Ownership Guidelines for Harley-Davidson, Inc.

II. Annual Grants to Non-Employee Directors

  Directors will receive an annual grant of share units, each representing the
value of one share of Company Common Stock, pursuant to plans adopted by the
Company from time to time. A new director who joins the Board other than at the
time of an annual meeting will also receive a grant of share units. Payment will
be deferred until a director ceases to serve as a director and will then be made
in stock.

III. Additional Compensation for and Payments to Non-Employee Directors

  Clothing Allowance. Each Director shall receive an annual clothing allowance
of $1,500 (plus related taxes) to purchase Harley-Davidson MotorClothes® apparel
and accessories.

  Discount on Company Products. Each Director shall receive the same discount on
Company products that is available to all Company employees.

--------------------------------------------------------------------------------

  Expenses. The Company will reimburse reasonable travel and related business
expenses that a Director incurs for attendance at all meetings of the Board and
committees and in connection with other Board of Directors or Company business.