EXHIBIT 10.18


 


HARLEY-DAVIDSON, INC.


 


Director Compensation Policy


Effective May 3, 2003


 


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

  	
   

  



 


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 (1⁄2) 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.                                     Additional
Compensation for and Payments to Non-Employee Directors


 


Clothing
Allowance.  Each
Director shall receive an annual clothing allowance of $1,500 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.