Document:

Exhibit
10.1

HARLEY-DAVIDSON,
INC.

1995 STOCK OPTION
PLAN

(as amended
through February 14, 2007)

ARTICLE I

PURPOSE

The
purpose of the Harley-Davidson, Inc. 1995 Stock Option Plan is to provide
favorable opportunities for certain selected employees of Harley-Davidson, Inc.
and its subsidiaries to purchase or receive shares of Common Stock of
Harley-Davidson, Inc., or to benefit from the appreciation thereof. Such
opportunities should provide an increased incentive for these employees to
contribute to the future success and prosperity of Harley-Davidson, Inc., thus
enhancing the value of the stock for the benefit of the shareholders, and
increase the ability of Harley-Davidson, Inc. to attract and retain individuals
of exceptional skill upon whom, in large measure, its sustained progress,
growth and profitability depend.

ARTICLE II

DEFINITIONS

The
following capitalized terms used in the Plan shall have the respective meanings
set forth in this Article:

2.1. BOARD:   The Board of Directors of Harley-Davidson, Inc.

2.2. CODE:   The Internal Revenue Code of 1986, as
amended.

2.3. COMMITTEE:   The Human Resources Committee of the Board;
provided that if any member of the Human Resources Committee is not both a Disinterested
Person and Outside Director, the Committee shall be comprised of only those
members of the Human Resources Committee who are both Disinterested Persons and
Outside Directors.

2.4. COMMON STOCK:   The
common stock of Harley-Davidson, Inc.

2.5. COMPANY:   Harley-Davidson, Inc. and any of its Subsidiaries.

2.6. DISABILITY:   Disability within the meaning of Section
22(e)(3) of the Code, as determined by the Committee.

2.7. DISINTERESTED PERSONS: Non-employee directors
within the meaning of Rule 16b-3 as promulgated under the Securities Exchange
Act of1934, as amended.

2.8. EMPLOYER:  The entity that employs the employee or
Optionee.

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2.9. FAIR MARKET VALUE:   (From and after February 14, 2007) Per share
of Common Stock on the date as of which Fair Market Value is being determined,
if the Common Stock is listed for trading on the New York Stock Exchange, the
closing sales price on the date in question as reported in The Wall Street
Journal, or if no sales of Common Stock occur on the date in question, on the
last preceding date on which there was a sale on such exchange.

2.10. ISO:   An incentive stock option within the meaning
of Section 422 of the Code and which is designated as an incentive option by
the Committee.

2.11. NON-ISO:   A stock option which is not an ISO.

2.12. OPTION:   A
stock option granted under the Plan. Options include both ISOs and Non-ISOs.

2.13. OPTION PRICE:   The purchase price of a share of Common Stock
under an Option.

2.14. OPTIONEE:   A person who has been granted one or more
Options.

2.15. OUTSIDE DIRECTORS:   Outside Directors within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder.

2.16. PARENT CORPORATION: The parent corporation, as
defined in Section 424(e) of the Code.

2.17. PLAN:  The
Harley-Davidson, Inc. 1990 Stock Option Plan.

2.18. RETIREMENT:   Retirement on or after age sixty-two or, with
the consent of the Committee, at an earlier age.

2.19. SUBSIDIARY:   A corporation, limited partnership, general
partnership, limited liability company, business trust or other entity of which
more than fifty percent (50%) of the voting power or ownership interest is
directly and/or indirectly held by the Harley-Davidson, Inc.

2.20. TERMINATION DATE:   A date fixed by the Committee but not later
than the day preceding the tenth anniversary of the date on which the Option is
granted.

ARTICLE III

ADMINISTRATION

3.1.  The
Committee shall administer the Plan and shall have full power to grant Options,
construe and interpret the Plan, establish and amend rules and regulations for
its administration, and perform all other acts relating to the Plan, including
the delegation of administrative responsibilities, which it believes reasonable
and proper.

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3.2.  Subject to the provisions of the Plan, the
Committee shall, in its discretion, determine who shall be granted Options, the
number of shares subject to option under any such Options, the dates after
which Options, the dates after which Options may be exercise, in whole or in
part, whether Options shall be ISOs, and the terms and conditions of the
Options.

3.3.   Any decision 
made, or action taken, by the Committee arising out of or in
connection  with the  interpretation and  administration of the Plan shall be final and
conclusive.

3.4   To the extent permitted by applicable law,
the Committee may, in its discretion, delegate to the Chief Executive Officer
of the Company any or all of the authority and responsibility of the Committee
under the Plan to grant Options to employees of the Company or its affiliates
and/or persons who have been engaged to become employees of the Company or its affiliates,
in each case other than employees who are, or persons engaged to become
employees who upon employment will be, subject to the provisions of Section 16
of the Securities and Exchange Act of 1934, as amended, at the time any such
delegated authority or responsibility is exercised. To the extent that the
committee has delegated to the Chief Executive Officer the authority and
responsibility of the Committee, all references to the Committee in the Plan
other than in this Section 3.4 shall include the Chief Executive Officer with
respect to the matters delegated. No such delegation shall preclude the
Committee from exercising the authority and responsibility delegated.

ARTICLE IV

SHARES SUBJECT TO THE
PLAN

4.1.  The total number of shares of Common Stock
available for grants of Options under the Plan shall be 15,200,000; provided
that Options for not more than 800,000 shares of Common Stock shall be granted
to an Optionee in any calendar year under the Plan, which amount shall be
reduced by the amount of Common Stock subject to options granted to such
Optionee in such calendar year under any other stock option plan of the
Company. The foregoing amounts shall be subject to adjustment in accordance
with Article VIII of the Plan. If an Option or portion thereof shall expire, be
canceled or terminate for any reason without having been exercised in full, the
unpurchased shares covered by such Option shall be available for future grants
of Options. An Option, or portion thereof, exercised through the exercise of a
stock appreciation right pursuant to Section 6.7 of the Plan shall be treated,
for the purposes of this Article, as though the Option, or portion thereof, had
been exercised through the purchase, that was so exercised shall not be
available for future grants of Options.

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ARTICLE V

ELIGIBILITY

5.1.  Options may be granted to key employees of the
Company or to persons who have been engaged to become key employees of the
Company. Key employees will comprise, in general, those who contribute to the
management, direction and overall success of the Company, including those who
are members of the Board. Members of the Board who are not employees of the Company
shall not be eligible for Option grants.

ARTICLE VI

TERM OF OPTIONS

6.1. OPTION AGREEMENTS:  All Options shall be evidenced by written agreements
executed by the Company. Such Options shall be subject to the applicable
provisions of the Plan, and shall contain such provisions as are required by
the Plan and any other provisions the Committee may prescribe. All agreements
evidencing Options shall specify the total number of shares subject to each
grant, the Option Price and the Termination Date. Those Options that comply
with the requirements for an ISO set forth in Section 422 of the Code and are
designated ISOs by the Committee shall be ISOs and all other Options shall be
Non-ISOs.

6.2. OPTION PRICE:  The Option Price shall be set by the
Committee; provided, however, that the price per share shall not be less than
the Fair Market Value of a share of Common Stock on the date the Option is
granted.

6.3.  PERIOD OF EXERCISE:  The Committee shall determine the dates after which
Options may be exercised in whole or in part. If Options are exercisable in
installments, installments or portions thereof that are exercisable and not
exercised shall accumulate and remain exercisable. The Committee may also amend
an Option to accelerate the dates after which Options may be exercised in whole
or in part. However, no Option or portion there of shall be exercisable after
the Termination Date.

6.4. SPECIAL RULES
REGARDING ISOS GRANTED TO CERTAIN EMPLOYEES:

Notwithstanding any contrary provisions of Sections 6.2 and 6.3 of the
Plan, no ISO shall be granted to any employee who, at the time the Option is granted,
owns (directly or indirectly, within the meaning of Section 424(d) of the Code)
more than ten percent of the total combined voting power of all classes of
stock of the Employer or of any Subsidiary or Parent Corporation thereof,
unless (a) the Option Price under such Option is at least 110 percent of the
Fair Market Value of a share of Common Stock on the date the Option is granted
and (b) the Termination Date of such Option is a date not later than the day
preceding the fifth anniversary of the date on which the Option is granted.

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6.5. MANNER OF EXERCISE AND PAYMENT: An Option, or
portion thereof, shall be exercised by delivery of a written notice of exercise
to the Company and provision (in a manner acceptable to the Committee) for payment
of the full price of the shares being purchased pursuant to the Option and any
withholding taxes due thereon.

6.6. TAXES:

a.                                       WITHHOLDING  TAXES. 
The Company is entitled to withhold the amount of any tax attributable
to any amount payable or Common Stock delivered or deliverable under this Plan,
and the Company may defer making payment or delivery if any such tax may be
pending unless and until indemnified to its satisfaction. An Optionee shall
satisfy the federal, state and local withholding tax obligations arising in
connection with an Option in a manner acceptable to the Committee.

b.                                      NO
GUARANTEE OF TAX TREATMENT. The Company does not guarantee to any Optionee or
any other person with an interest in an Option that any Option intended to be
exempt from Code Section 409A shall be so exempt, or that any Option intended
to comply with Code Section 409A shall so comply, and nothing in this Plan
obligates the Company or any affiliate to indemnify, defend or hold harmless
any individual with respect to the tax consequences of any such failure

6.7. STOCK APPRECIATION
RIGHTS: At or after the grant of an Option, the Committee, in its discretion,
may provide an Optionee with an alternate means of exercising an Option, or a
designated portion thereof, by granting the Optionee a stock appreciation
right. A “stock appreciation right”: is a right to receive, upon exercise of an
Option or any portion thereof, in the Committee’s sole discretion, an amount of
cash equal to, and/or shares of Common Stock having a Fair Market Value on the
date of exercise equal to, the excess of the Fair Market Value of a share of
Common Stock on the date of exercise over the Option Price, multiplied by the
number of shares of Common Stock that the Optionee would have received had the
Option or portion thereof been exercised through the purchase of shares of
Common Stock at the Option Price, provided that (a) such Option or portion
thereof has been designated as exercisable in this alternative manner, (s) such
Option or portion thereof is otherwise exercisable, and (c) the Fair Market
Value of a share of Common Stock on the date of exercise exceeds the Option
Price.

6.8.  NONTRANSFERABILITY
OF OPTIONS: Except as may otherwise be provided by the Committee, each Option
shall, during the Optionee’s lifetime, be exercisable only by the Optionee, and
neither it nor any right hereunder shall be transferable otherwise than by will
or the laws of descent and distribution or be subject to attachment, execution
or other similar process. In the event of any attempt by the Optionee to
alienate, assign, pledge, hypothecate or other wise dispose of an Option or of
any right hereunder, except as provided for herein, or in the event of any levy
or any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the
Optionee and the Option shall thereupon become null and void.

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Transfers of Options under the Plan pursuant to any judgment, decree,
or order (including approval of a property settlement agreement) which relates
to the provision of child support, alimony payments, or marital property rights
to a spouse, former spouse, child, or other dependent of a participant, and is
made pursuant to a State domestic relations law (including a community property
law) and satisfies, to the extent applicable, the provisions of Internal
Revenue Code Section 414(p) are allowed.

6.9.    
CESSATION OF EMPLOYMENT OF OPTIONEE:

a.             CESSATION OF
EMPLOYMENT OTHER THAN BY REASON OF RETIREMENT, DISABILITY OR DEATH. Except as
may be otherwise provided by the Committee, if an Optionee shall cease to be
employed by the Company otherwise than by reason of Retirement, Disability, or
death, (i) each     Option held by the
Optionee, together with all rights thereunder, that is not vested shall
terminate on the date of cessation of employment,  to the extent not previously exercised and
(ii) the Optionee shall have a period of 90 days from the date of cessation of
employment to exercise each Option held by the Optionee that is vested on the
date of cessation of employment. At the end of such 90-day period, each such Option
that has not been exercised, together with all rights thereunder, shall
terminate, to the extent not previously exercised.

b.            CESSATION OF EMPLOYMENT
BY REASON OF RETIREMENT OR DISABILITY. If an Optionee shall cease to be
employed by the Company by reason of Retirement or Disability, each Option held
by the Optionee shall remain exercisable, to the extent it was exercisable at
the time of cessation of employment, until the earliest of:

i.                  the
Termination Date,

ii.               the
death of the  Optionee, or such later
date not more than one year after the death of the Optionee as the Committee,
in its discretion, may provide pursuant to Section 6.9(c) of the Plan,

iii.            the
third anniversary of the date of the cessation of the Optionee’s employment, if
employment ceased by reason of Retirement, or

iv.           the
first anniversary of the date of the cessation of the Optionee’s employment by
reason of Disability;

v.              and
thereafter all such Options shall terminate together with all     rights hereunder, to the extent not
previously exercised.

c.             CESSATION OF
EMPLOYMENT BY REASON OF DEATH. In the event of the death of the Optionee, while
employed by the Company, an Option may 
be exercised at any time or from time to time prior to the earlier
of  the 

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Termination Date or the first anniversary of the date
of the Optionee’s death, by the person or persons to whom the Optionee’s rights
under each Option shall pass by will or by the applicable laws of descent and
death. In the event of the death of the Optionee while entitled to exercise an
Option pursuant to Section 6.9(b), the Committee, in its discretion, may permit
such Option to be exercised at any time or from time to time prior to the
Termination Date during a period of up to one year from the death of the
Optionee, as shall pass by will of by the applicable laws of descent and
distribution, to the extent that the Option was exercisable at the time of
cessation of the Optionee’s employment. Any person or person to whom an
Optionee’s rights under an Option have passed by will or by the applicable laws
of descent and distribution shall be subject to all terms and condition of the
plan and the Option applicable to the Optionee.

6.10. NOTIFICATION OF
SALES OF COMMON STOCK: Any Optionee who disposes of shares of Common Stock
acquired upon the exercise of an ISO either (a) within two years after the date
of the grant of the ISO under which the 
stock was acquired or (b) within one year after the transfer of such
shares  to the Optionee, shall notify the
Company of such disposition and of the 
amount realized upon such disposition.

ARTICLE VII

LIMITATIONS AND
ACCELERATIONS ON EXERCISABILITY

7.1. Notwithstanding any
other provision of this Plan, in the case of an ISO, the aggregate Fair Market
Value (determined at the time the ISO is granted) of the shares of Common Stock
with respect to which all “incentive stock options” (within the meaning of
Section 422 of the Code) are first exercisable by the Optionee during any
calendar year (under this Plan and under all other incentive stock option plans
of the Employer, any Subsidiary and any Parent Corporation) shall not exceed
$100,000.

7.2. Each Option granted
under the Plan shall become vested and immediately exercisable upon a Change of
Control Event, whether or not the Option was theretofore exercisable.  For purposes of this Section 7.2:

(a) “Change of Control Event” means any one of the
following:

(i)  Continuing Directors no longer constitute at
least two-thirds ofthe 

Directors constituting the Board;

(ii) any person or groups (as  defined in Rule 13d-5 under the Securities
Exchange Act of 1934, as amended (“Exchange Act”)), together with its
affiliates, becomes the beneficial owner, directly or indirectly, of 20% or
more of Harley-Davidson, Inc.’s then outstanding Common Stock or 20% or more of
the voting power of Harley-Davidson, Inc.’s Directors;

(iii) the approval by Harley-Davidson, Inc.’s
stockholders of the merger or consolidation of Harley-Davidson, Inc. with any
other corporation, the sale of substantially all of Harley-Davidson, Inc.’s
assets or the liquidation or dissolution of Harley-Davidson, inc., unless, in
the case of a merger or consolidation, the Continuing Directors in office immediately
prior to such merger or consolidation constitute at least two-thirds of the
directors constituting the board of directors of the surviving corporation of
such merger or consolidation and any parent(as defined in Rule 12b-2 under the
Exchange Act) of such corporation; or

(iv) at least two-thirds of the Continuing Directors
who are Disinterested Persons in office immediately prior to any other action
proposed to be taken by Harley-Davidson, Inc.’s stockholders or by the Board
determine that such proposed action, if taken, would constitute a change of
control of Harley-Davidson, Inc. and such action is taken.

Notwithstanding the foregoing, with respect to a grant of an Option
that is deferred compensation subject to Code Section 409A, the term “Change of
Control Event” as defined above shall be deemed amended to conform to the
definition provided in guidance, rules or regulations promulgated by the
Internal Revenue Service in construing Code Section 409A; and

(b) “Continuing Director” means any individual who is either:

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(i)             a
member of the Board on the date hereof or

(ii)          a
member of the Board whose election or nomination to the Board was approved by a
Vote of at least two-thirds (2/3) of the Continuing Directors (other than a
person whose election was as a result of an actual or threatened proxy or other
control contest).

ARTICLE VIII

ADJUSTMENTS

8.1.  If (a) the Company shall at any time be
involved in a merger or other transaction in which the Common Stock is changed
or exchanged; or (b) the Company shall subdivide or combine its Common Stock or
the Company shall declare a dividend payable in its Common Stock, other
securities (other than any associated preferred stock purchase rights issued
pursuant to that certain Rights Agreement, dated February 17, 2000, between the
Company and ComputerShare Investor Services, LLC, as successor rights agent, or
similar stock purchase rights that the Company might authorize and issue in the
future) or other property; or (c) the Company shall effect a cash dividend the
amount of which exceeds 15% of the trading price of the Common Stock at the
time the dividend is declared or any other dividend or other distribution on
the Common Stock in the form of cash, or a repurchase of Common Stock, that the
Board determines by resolution is special or extraordinary in nature or that is
in connection with a transaction that the Company characterizes publicly as a
recapitalization or reorganization involving the Common Stock; or (d) any other
event shall occur which, in the case of this clause (d), in the judgment of the
Committee necessitates an adjustment to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
an Award, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of securities subject to the Plan
and which thereafter may be the subject of Options; (ii) the number and type of
securities subject to outstanding Options; (iii) the Option Price with respect
to any Option; and (iv) the number of shares of Common Stock that may be issued
pursuant to Options granted to an Optionee in any calendar year; provided, however,
that each such adjustment, in the case of ISOs, shall be made in such manner as
not to constitute a “modification” within the meaning of Section 424(h)(3) of
the Code. Unless the Committee determines otherwise, any such adjustment to an
Option that is exempt from Code Section 409A shall be made in manner that
permits the Option to continue to be so exempt, and any adjustment to an Option
that is subject to Code Section 409A shall be made in a manner that complies
with the provisions thereof.  The judgment
of the Committee with respect to any matter referred to in this Article shall
be conclusive and binding upon each Optionee.

ARTICLE IX

AMENDMENT AND
TERMINATION OF PLAN

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9.1. The Board may at any
time, or from time to time, suspend or terminate the Plan in whole or in part
or amend it in such respects as the Board may deem appropriate, provided,
however, that no such amendment shall be made, which would, without approval of
the shareholders:

a.    materially modify the eligibility
requirements for receiving Options;

b.              increase
the aggregate number of Shares of Common Stock which may be  issued pursuant to Options granted under the
Plan, except as is provided for in accordance with Article VIII of the Plan;

c.               increase
the number of shares of Common Stock which may be issued pursuant to
Options  granted to an Optionee in any
calendar year,  except as is provided for
in accordance with Article VIII of the plan;

d.            reduce
the minimum Option Price, except as is provided for in accordance with Article
VIII of the Plan;

e.             extend
the period of granting Options; or

f.                 materially
increase in any other way the benefits accruing to Optionees.

9.2. No amendment,
suspension or termination of this Plan shall, without the Optionee’s consent,
alter or impair any of the rights or obligations under any Option theretofore
granted to an Optionee under the Plan, but the Committee need not obtain
Optionee (or other interested party) consent for the cancellation of an Award
pursuant to the provisions of Section 8.1, the modification of an Option to the
extent deemed necessary to comply with any applicable law or the listing
requirements of any principal securities exchange or market on which the Common
Stock is then traded, to preserve favorable accounting treatment of any Option
for the Company, or the adoption, amendment or rescission of rules and
regulations relating to this Plan that do not materially and adversely affect
the Optionee in respect of any Option then outstanding

9.3. The Board may amend
this Plan, subject to the limitations cited above, in such manner as it deems
necessary to permit the granting of Options meeting the requirements of future
amendments or issued regulations, if any, to the Code.

9.4.  The provisions of Code Section 409A are
incorporated herein by reference to the extent necessary for any Option that is
subject to Code Section 409A to comply therewith.

ARTICLE X

GOVERNMENT AND
OTHER REGULATIONS

10.1. The obligation of the Company to issue or
transfer and deliver shares for Options exercised under the plan shall be
subject to all applicable laws, regulations, rules, 

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orders and approvals which shall then be in effect and required by
governmental entities and the stock exchanges on which Common Stock is traded.

ARTICLE XI

MISCELLANEOUS
PROVISIONS

11.1. PLAN DOES NOT CONFER EMPLOYMENT OR SHAREHOLDER
RIGHTS: The right of the Employer to terminate (whether by dismissal,
discharge, retirement or otherwise) the Optionee’s employment with it at any
time at will, or as otherwise provided by any agreement between the Company and
the Optionee, is specifically reserved. Neither the Optionee nor any person
entitled to exercise the Optionee’s rights in the event of the Optionee’s death
shall have any rights of a shareholder with respect to the shares subject to each
Option, except to the extent that, and until, such shares shall have been issued
upon the exercise of each Option.

11.2. PLAN EXPENSES: 
Any expenses of administering this Plan shall be borne by the Company.

11.3. USE OF EXERCISE PROCEEDS: Payments received from
Optionees upon the exercise of Options shall be used for the general corporate
purposes of the Company, except that any stock received in payment may be
retired, or retained in the Company’s treasury and reissued.

11.4. INDEMNIFICATION: In
addition to such other rights of indemnification as they may have as members of
the Board, or the Committee, the members of the Committee and the Board shall
be indemnified by the Company against all costs and expenses reasonably
incurred by them in connection with nay action, suit or proceeding to which
they or any of them may be party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith; provided that
upon the institution of any such action, suit or proceeding a Committee or
Board member shall, in writing, give the Company notice thereof and an
Opportunity, at its own expense, to handle and defend the same before such
Committee or Board member undertakes to handle and defend it on such member’s
own behalf.

ARTICLE XII

SHAREHOLDER
APPROVAL AND EFFECTIVE DATES

12.1. The Plan shall
become effective when it is approved by the shareholders of Harley-Davidson,
Inc. at a shareholders meeting by the requisite vote under New York Stock
Exchange Rules, Internal Revenue Code Section 162(m) and Rule 16b-3 under the
Securities Exchange Act of 1934. Options may not be granted under the Plan
after April 26, 2005.

 

 10Exhibit
10.2

HARLEY-DAVIDSON, INC.

DIRECTOR STOCK PLAN

As amended

ARTICLE I

Purpose

The purpose of the
Harley-Davidson, Inc. Director Stock Plan is to facilitate payment of
compensation to nonemployee directors in the form of Common Stock of
Harley-Davidson, Inc. or in a form the value of which is based upon the value
of Common Stock of Harley-Davidson, Inc. 
Such payment should provide a method for nonemployee directors to meet
the requirements of the Director and Senior Executive Stock Ownership Guidelines
for Harley-Davidson, Inc. and an increased incentive for nonemployee directors
to contribute to the future success and prosperity of Harley-Davidson,
Inc.  We believe this will, in turn,
enhance the value of the stock for the benefit of the shareholders, and
increase the ability of Harley-Davidson, Inc. to attract and retain directors
of exceptional skill upon whom, in large measure, its sustained growth and
profitability depend.

ARTICLE
II

Definitions

The following capitalized
terms used in the Plan shall have the respective meanings set forth in this
Article:

2.1.          Annual Retainer Fee: 
The annual retainer fee then in effect for service by an Outside
Director as a director, board committee chair and/or committee member,
excluding grants of “Share Units” pursuant to Article IX hereof.

2.2.          Board:  The Board of
Directors of the Company.

2.3.          Code:  The Internal
Revenue Code of 1986, as amended.

2.4.          Committee:  The
Nominating and Corporate Governance Committee of the Board; provided that if
any member of the Nominating and Corporate Governance Committee is not a
Disinterested Person, the Committee shall be comprised of only those members of
the Nominating and Corporate Governance Committee who are Disinterested
Persons.

2.5.          Common Stock:  The
common stock of the Company.

2.6.          Company: 
Harley-Davidson, Inc.

2.7.          Deferral Election: An election by an Outside Director to
defer receiving all or any portion of the shares of Common Stock that would
otherwise be transferred to such Outside Director pursuant to a Share Election.

2.8.          Disinterested Persons: 
Nonemployee directors within the meaning of Rule 16b-3 as promulgated
under the Securities Exchange Act of 1934, as amended.

2.9.          Fair Market Value:  (From
and after February 14, 2007) On the date as of which Fair Market Value is being
determined, if the Common Stock is listed for trading on the New York Stock
Exchange, the closing sales price on the date in question as reported in The
Wall Street Journal, or if no sales of Common Stock occur on the date in question,
on the last preceding date on which there was a sale on such exchange.

2.10.        Option:  A stock
option granted under the Plan.

2.11.        Option Price:  The
purchase price of a share of Common Stock under an Option.

2.12.        Optionee:  A person
who has been granted one or more Options.

2.13.        Outside Director: 
Each member of the Board who is not also an employee of the Company or
any Subsidiary (including members of the Committee).

2.14.        Plan:  The
Harley-Davidson, Inc. Director Stock Plan.

2.15.        Share Accounts.  An
Outside Director’s Deferral Share Account and/or Grant Share Account.

2.16.        Share Election:  An
election by an Outside Director to receive either 50% or 100% of his or her
Annual Retainer Fee in the form of Common Stock (subject to any Deferral
Election by an Outside Director), with the receipt of such shares of Common
Stock to be in lieu of any cash payment for that portion of his or her Annual
Retainer Fee; provided, however, that if, at the time an Annual Retainer Fee is
payable, an Outside Director satisfies, through the ownership of Common Stock
and/or Share Units credited to his or her Share Accounts, the stock ownership
guidelines for directors then in effect that the Board or any committee of the
Board has established, then the Outside Director may make a Share Election to
receive 0% of such Annual Retainer Fee in the form of Common Stock.

2.17.        Subsidiary:  A
corporation, limited partnership, general partnership, limited liability
company, business trust or other entity of which more than fifty percent (50%)
of the voting power or ownership interest is directly and/or indirectly held by
the Company.

2.18.        Termination Date:  The
day preceding the tenth anniversary of the date on which the Option is granted.

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ARTICLE
III

Administration

3.1.          The Committee:  The
Committee shall administer the Plan and shall have full power to construe and
interpret the Plan, establish and amend rules and regulations for its
administration, and perform all other acts relating to the Plan, including the
delegation of administrative responsibilities, which it believes reasonable and
proper.

3.2.          Actions Final:  Any
decision made, or action taken, by the Committee arising out of or in
connection with the interpretation and administration of the Plan shall be
final and conclusive.

ARTICLE
IV

Shares
Subject to the Plan

4.1.          The
total number of shares of Common Stock available for delivery under the Plan
shall be 200,000 as of May 2, 1998 (after giving effect to a 2-for-1 stock
split effected in 2000). The foregoing amount shall be subject to adjustment in
accordance with Article X of the Plan. If an Option or portion thereof shall
expire, be canceled or terminate for any reason without having been exercised
in full, the unpurchased shares covered by such Options shall be available for
future grants of Options. Shares of Common Stock to be delivered under the Plan
shall be made available solely from authorized and issued shares of Common
Stock reacquired and held as treasury shares. In no event shall the Company be
required to deliver fractional shares of Common Stock under the Plan. Whenever
under the terms of the Plan a fractional share of Common Stock would otherwise
be required to be delivered, there shall be delivered in lieu thereof one full
share of Common Stock.  Payments in
respect of an Outside Director’s Share Accounts that are made in cash shall not
reduce the number of shares of Common Stock available for delivery under the
Plan.

ARTICLE V

Eligibility

5.1.          Only
Outside Directors shall be entitled to participate in the Plan.

ARTICLE
VI

Options

6.1.          Option Grants:  Prior
to December 31, 2002, each Outside Director who served as a member of the Board
immediately following an annual meeting of shareholders of the Company was
automatically granted on the first business day after such meeting (the “Annual
Grant Date”) an Option for the purchase of such number of shares of Common
Stock (rounded up to the nearest multiple of 100) whose Fair Market Value on
the Annual Grant Date equaled three (3) times the Optionee’s Annual Retainer
Fee other than committee chair retainer fees. 
No such Option shall be granted under the Plan after December 31, 2002.

 3
 

6.2.          Option Agreements:  All
Options shall be evidenced by written agreements executed by the Company. Such
options shall be subject to the applicable provisions of the Plan, and shall
contain such provisions as are required by the Plan and any other provisions
the Committee may prescribe. All agreements evidencing Options shall specify
the total number of shares subject to each grant, the Option Price and the
Termination Date.

6.3.          Option Price:  The
Option Price shall be the Fair Market Value of a share of Common Stock on the
Annual Grant Date.

6.4.          Period of Exercise: Options shall be exercisable from and
after the Annual Grant Date and shall terminate one year after the Optionee
ceases to serve as a member of the Board for any reason, except that as to any
Optionee who is removed from the Board for cause in accordance with the Company’s
Restated Articles of Incorporation, the Options held by the Optionee shall
terminate immediately on such removal. In any event, no Option or portion
thereof shall be exercisable after the Termination Date.

6.5.          Manner of Exercise and Payment:  An Option, or portion thereof, shall be
exercised by delivery of a written notice of exercise to the Company and provision
(in a manner acceptable to the Committee) for payment of the full price of the
shares being purchased pursuant to the Option and any withholding taxes due
thereon.

6.6.          Nontransferability of Options:  Except as may be otherwise provided by the
Committee, each Option shall, during the Optionee’s lifetime, be exercisable
only by the Optionee and neither it nor any right hereunder shall be
transferable otherwise than by will or the laws of descent and distribution or
be subject to attachment, execution or other similar process. In the event of
any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of an Option or of any right hereunder, except as provided
for herein, or in the event of any levy or any attachment, execution or similar
process upon the rights or interest hereby conferred, the Company may terminate
the Option by notice to the Optionee and the Option shall thereupon become null
and void.

ARTICLE
VII

Share
Election

7.1.          Election:  At any time
and from time to time, each Outside Director may make a Share Election.  An Outside Director’s Share Election (i) must
be in writing and delivered to the Treasurer of the Company, (ii) shall be
effective commencing on the date the Treasurer receives the Share Election or
such later date as may be specified in the Share Election, and (iii) shall
remain in effect unless modified or revoked by a subsequent Share Election in
accordance with the provisions hereof. 
If an Outside Director elects (or is deemed to have elected) to receive
only 50% of his or her Annual Retainer Fee in the form of shares of Common
Stock, then the remaining 50% shall be paid in cash (subject to any deferral by
the Outside Director under the Company’s Deferred Compensation Plan for
Nonemployee Directors (the “Cash Deferral Plan”)). If an Outside Director who
is entitled to do so elects to receive 0% of his or her Annual Retainer Fee in
the form of shares of Common Stock, then all of his or her Annual Retainer Fee
shall be paid in cash (subject to any deferral by the Outside Director under
the Cash Deferral 

 4
 

Plan). If an Outside Director has not made a Share
Election, the Director will be deemed to have made a Share Election to receive
50% of his or her Annual Retainer Fee in the form of Common Stock.

7.2.          Transfer of Shares: 
Subject to any Deferral Election by an Outside Director, shares of
Common Stock issuable to an Outside Director pursuant to a Share Election shall
be transferred to such Outside Director as of the first business day following
each annual meeting of the shareholders of the Company, except that, for an
Outside Director elected to the Board at a time other than at an annual meeting
of the shareholders of the Company, shares of Common Stock issuable to the
Outside Director pursuant to a Share Election shall be transferred to such
Outside Director as of the first business day following the first meeting of
the Board or a committee of the Board that the Outside Director attends.  The total number of shares of Common Stock to
be so transferred shall be determined by dividing (x) the dollar amount of the
Annual Retainer Fee payable to which the Share Election applies, by (y) the
Fair Market Value of a share of Common Stock on day on which the Annual
Retainer Fee is payable to the Outside Director.

ARTICLE
VIII

Deferral
Elections

8.1.          Deferral Election:  Each Outside Director may make a Deferral
Election to defer receiving all or 50% of the shares of Common Stock
that would otherwise be transferred to such Outside Director pursuant to a
Share Election with respect to any Annual Retainer Fees otherwise payable after the effective date of the Deferral Election.  A Deferral Election, or a modification
or revocation of a Deferral Election by a subsequent Deferral Election, must be
in writing and delivered to the Treasurer of the Company.  Each Outside Director serving as a member of
the Board as of the Company’s 2003 Annual Meeting of Shareholders may make a
Deferral Election at any time on or before May 3, 2003.  Thereafter, a newly eligible
Outside Director may make his or her initial Deferral Election within 30 days
of becoming an Outside Director.  Such
initial Deferral Elections shall be effective as of the date on which they are
delivered to the Treasurer of the
Company.  Deferral Elections are
irrevocable until changed.  Any Deferral
Elections other than in connection with the Company’s 2003 Annual
Meeting of Shareholders and other than when
an Outside Director is initially eligible to make a Deferral Election, and any
changes to existing Deferral Elections, may be made only during the 30 day
period up to and including an annual meeting of shareholders of the Company,
and shall be effective as of such annual meeting of shareholders.  All Deferral Elections under the Plan shall
automatically terminate upon the occurrence of a Change of Control Event.  The definition of “Change of Control Event”
is as set forth in Schedule A to the Plan, which may be revised from time to
time by the Committee to maintain consistency with the definition of this term
used by the Company for other corporate compensation-related purposes. The
term “Change of Control Event” as defined above shall be deemed amended to
conform to the definition provided in guidance, rules or regulations
promulgated by the Internal Revenue Service in construing Code Section 409A.

8.2.          Deferral Share Accounts: 
An Outside Director who makes a Deferral Election shall have the number
of deferred shares of Common Stock (including fractions of a share) that 

 5
 

would otherwise be transferred pursuant to Section 7.2 credited as whole and fractional “Share Units,”
with fractional units calculated to four decimal places,  to a “Deferral Share Account” for the
Outside Director, for recordkeeping purposes
only.

8.3.          Cash Dividends and Deferral Share Accounts:  Whenever cash dividends are paid by the
Company on outstanding Common Stock, on the payment date therefor there shall
be credited to the Outside Director’s Deferral Share Account a number of additional
Share Units, with fractional units
calculated to four decimal places, equal to (i) the aggregate dividend
that would be payable on outstanding shares of Common Stock equal to the number
of Share Units credited to such Deferral Share Account on the record date for
the dividend, divided by (ii) the Fair Market Value of a share of Common Stock
on the last trading business day immediately preceding the date of payment of
the dividend.

8.4.          Payments:  Upon cessation of an Outside Director’s service
as a director of the Company for any reason, or upon the occurrence of a Change
of Control Event, the Company will make payments to the Outside Director
(or, in case of the death of the Outside
Director, to his or her beneficiary designated in accordance with Section 13.5
or, if no such beneficiary is designated, to his or her estate), as
compensation for prior service as a director, in respect of the Outside
Director’s Deferral Share Account.  All
payments in respect of a Deferral Share Account shall be made in shares of
Common Stock by converting Share Units into Common Stock on a one-for-one
basis.  However, to the extent shares of
Common Stock are not available for delivery under the Plan, the Committee may
direct that all or any part of the payments in respect of a Deferral Share
Account be made in cash rather than by delivery of Common Stock, in which case
the cash payment shall be determined by multiplying the number of Share Units
in the Deferral Share Account that are the subject of the cash payment by the Fair
Market Value of a share of Common Stock on the last trading business day
preceding the date on which payment is made.

a.     Form of Payments:  An Outside Director may elect to have
payments in respect of a Deferral Share Account made either in (i) a single
payment, or (ii) annual installments; provided, however, that if an Outside
Director making a Deferral Election under the Plan has elected to defer cash
compensation under the Cash Deferral Plan, then that Outside Director must
elect a payment option under the Plan that provides the same timing of deferred
payments as the payment option elected under the Cash Deferral Plan.  Under the
installment payment option, at the time an Outside Director makes his or her
initial Deferral Election, or thereafter in accordance with Plan rules, the
Outside Director may select (subject to the proviso in the immediately
preceding sentence) the number of years over which benefits are to be paid to
the Outside Director, up to a maximum of 5 years, except that the number of
installments selected may not result in any one installment payment with
respect to less than 100 Share Units. 
The payment option elected shall apply to the Outside Director’s entire Deferral
Share Account.  The installment payment
option does not apply upon the occurrence of a Change of Control Event.  An Outside Director who fails to make any
payment election under the Plan and has not made a payment election under the
Cash Deferral Plan shall be deemed to have elected the single payment option.  An Outside Director who fails to make any
payment election under the Plan but has made a payment election under the Cash
Deferral Plan will be deemed to have elected under the Plan the same payment
option that he or she has made under the Cash Deferral Plan.  If at the time of the cessation of an Outside Director’s service there exists a conflict
in the payment 

 6
 

options that the Outside
Director elected under the Plan and under the Cash Deferral Plan, then that
Outside Director will be deemed to have made a payment election under
the Plan that provides the same timing of deferred payments as the payment
option that the Outside Director elected
under the Cash Deferral Plan.

b.     If
the Outside Director has elected the single payment option, then the Company
will make payment to the Outside Director in respect of the number of Share
Units credited to the Outside Director’s Deferral Share Account within 30 days after the end of the quarter in
which the Outside Director ceases service as a director of the Company.  In addition, the Company will make payment to
the Outside Director in respect of the number of Share Units credited to the
Outside Director’s Deferral Share Account promptly upon the occurrence of a Change of Control Event.

c.     If the Outside Director has elected the
installment payment option, then the first installment will be made within 30 days after the end of the quarter in
which the Outside Director ceases service as a director of the Company, and
each subsequent installment shall be paid
in July of each year following the year in which the first installment is paid
to the Outside Director during the installment period.  The annual installment payment amount for any
year shall be initially determined by dividing the number of Share Units
credited to the Outside Director’s Deferral Share Account as of January 1 of
the year for which the payment is being made and for which such an election is
in effect by the number of installment payments remaining to be made, and then
rounding the quotient obtained for all but the final installment to the next
lowest whole number.

d.     Changes by an Outside Director in the payment option elected and/or in the number of years in
the installment payment period (not
to exceed 5 years) shall be in writing and filed with the Treasurer of the Company not less than 12 months before
the date the Outside Director ceases service as a director of the Company for
any reason.  If a change is requested
less than 12 months in advance of the date the Outside Director ceases service
as a director of the Company for any reason, then the Outside Director’s
previous valid election of a form of payment shall be given effect.  If there
is no previous valid election of the payment option in effect, then payment
will be made under the single payment option.

8.5.          Hardship Payments:  The
Committee may, in its sole discretion, upon the finding that an Outside
Director has suffered a severe financial hardship, pay to the Outside Director
part or all of his or her Deferral Share Account, as needed to meet the Outside
Director’s need.

ARTICLE
IX

Share
Unit Grants

9.1.          Share Unit Grants. 
Each Outside Director shall automatically be granted Share Units under
the Plan in the manner set forth in this Article IX.  All grants of Share Units pursuant to this
Article IX shall immediately vest in full on the date of grant.

9.2.          Annual Share Unit Grants to Outside Directors.  Beginning with the first annual meeting of
shareholders held after April 28, 2006, each Outside Director shall, as of the
first 

 7
 

business day following such annual meeting, receive a
grant of such number of Share Units as the Board shall determine at the meeting
of the Board  coinciding with such
annual meeting.

9.3.          Grant of Share Units to Newly-Elected Outside Directors.  Any person who is first elected as an Outside
Director after April 29, 2006 at a time other than at an annual meeting of the
shareholders of the Company shall automatically be granted, as of the first
business day following the first meeting of the Board or a committee of the
Board that the Outside Director attends, a number of Share Units equal to the
number of Share Units last granted to each of the Outside Directors pursuant to
Section 9.2.

9.4.          Grant Share Accounts: 
An Outside Director who receives a grant of Share Units pursuant to Section
9.2 or Section 9.3 shall have the number of Share
Units granted to such Outside Director credited to a “Grant Share Account” established for the Outside Director, for recordkeeping purposes only.

9.5.          Cash Dividends and Grant Share Accounts:  Whenever cash dividends are paid by the
Company on outstanding Common Stock, on the payment date therefor there shall
be credited to the Outside Director’s Grant Share Account a number of
additional Share Units, with fractional
units calculated to four decimal places, equal to (i) the aggregate
dividend that would be payable on outstanding shares of Common Stock equal to
the number of Share Units credited to such Grant Share Account on the record
date for the dividend, divided by (ii) the Fair Market Value of a share of
Common Stock on the last trading business day immediately preceding the date of
payment of the dividend.

9.6.          Payments:  Within 30 days after the end of the quarter in
which an Outside Director ceases service as a director of the Company  for any reason, or upon the occurrence of a
Change of Control Event, the Company will make a payment to the Outside
Director (or, in case of the death of the
Outside Director, to his or her beneficiary designated in accordance with
Section 13.5 or, if no such beneficiary is designated, to his or her estate),
as compensation for prior service as a director, in respect of the
Outside Director’s Grant Share Account.  All
payments in respect of a Grant Share Account shall be made in shares of Common
Stock by converting Share Units into Common Stock on a one-for-one basis.  However, to the extent shares of Common Stock
are not available for delivery under the Plan, the Committee may direct that
all or any part of the payments in respect of a Grant Share Account be made in
cash rather than by delivery of Common Stock, in which case the cash payment
shall be determined by multiplying the number of Share Units in the Grant Share
Account that are the subject of the cash payment by the Fair Market Value of a
share of Common Stock on the last trading business day preceding the date on
which payment is made.

ARTICLE X

Adjustments

10.1.        If
(a) the Company shall at any time be involved in a merger or other transaction
in which the Common Stock is changed or exchanged; or (b) the Company shall
subdivide or combine its Common Stock or the Company shall declare a dividend
payable in its Common Stock, other securities (other than any associated
preferred stock purchase rights issued pursuant 

 8
 

to that certain Rights Agreement, dated February 17,
2000, between the Company and ComputerShare Investor Services, LLC, as
successor rights agent, or similar stock purchase rights that the Company might
authorize and issue in the future) or other property; or (c) the Company shall
effect a cash dividend the amount of which exceeds 15% of the trading price of
the Common Stock at the time the dividend is declared or any other dividend or
other distribution on the Common Stock in the form of cash, or a repurchase of
Common Stock, that the Board determines by resolution is special or
extraordinary in nature or that is in connection with a transaction that the
Company characterizes publicly as a recapitalization or reorganization
involving the Common Stock; or (d) any other event shall occur which, in the
case of this clause (d), in the judgment of the Committee necessitates an
adjustment to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of securities subject to the Plan; (ii) the number and type of
securities subject to outstanding Options; (iii) the Option Price with respect
to any Option; and (iv) the number of Share Units credited to each Outside
Director’s Share Accounts; provided, however, that Options subject to grant or
previously granted to Optionees and the number of Share Units credited to each
Outside Director’s Share Accounts under the Plan at the time of any such event
shall be subject to only such adjustment as shall be necessary to maintain the
proportionate interest of the Optionee or Outside Director and preserve,
without exceeding, the value of such Options and Outside Director’s Share
Accounts. Unless the Committee determines otherwise, any such adjustment to an
Option that is exempt from Code Section 409A shall be made in manner that
permits the Option to continue to be so exempt, and any adjustment to an Option
that is subject to Code Section 409A shall be made in a manner that complies
with the provisions thereof.  The
judgment of the Committee with respect to any matter referred to in this
Article shall be conclusive and binding upon each Optionee and Outside Director.

ARTICLE
XI

Amendment
and Termination of Plan

11.1.        General Powers:  The
Board of Directors may at any time terminate or suspend the Plan.  Subject to applicable limitations set forth
in New York Stock Exchange rules, the Code or Rule 16b-3 under the Securities
Exchange Act of 1934, the Board of Directors may amend the Plan as it shall
deem advisable including (without limiting the generality of the foregoing) any
amendments deemed by the Board of Directors to be necessary or advisable to
assure conformity of the Plan with any requirements of state and federal laws
or regulations now or hereafter in effect; provided, however, that the Board of
Directors may not amend either the provisions of Section 6.1 or the amount of
the Annual Retainer Fee more often than once in any six month period.

11.2.        No Impairment:  No
amendment, suspension or termination of this Plan shall, without the Outside
Director’s consent, alter or impair any of the rights or obligations under any
Option theretofore granted to an Outside Director under the Plan or other entitlement
of an Outside Director under the Plan. But, the Committee need not obtain Outside
Director (or other interested party) consent for the adoption, amendment or
rescission of rules and regulations relating to this Plan that do not
materially and adversely affect the Outside Director in respect of any Option or
other entitlement of an Outside Director under the Plan then outstanding.

 9
 

11.3.        Section 409A:  The provisions of Code Section 409A are
incorporated herein by reference to the extent necessary for any Option or
other entitlement of an Outside Director under the Plan that is subject to Code
Section 409A to comply therewith.

ARTICLE
XII

Government
and Other Regulations

12.1.        The
obligation of the Company to issue or transfer and deliver shares of Common
Stock under the Plan shall be subject to all applicable laws, regulations,
rules, orders and approvals which shall then be in effect and required by
governmental entities and the stock exchanges on which Common Stock is traded.

ARTICLE
XIII

Miscellaneous
Provisions

13.1.        Plan Does Not Confer Shareholder Rights:  Neither an Outside Director nor any person
entitled to exercise the Outside Director’s rights in the event of the Outside
Director’s death shall have any rights of a shareholder with respect to the
shares subject to an Option, Share Election or any Share Units held in the
Outside Director’s Share Accounts, except to the extent that, and until, such
shares shall have been issued upon the exercise of each Option, transfer of
shares pursuant to a Share Election or the delivery of shares in respect of the
Outside Director’s Deferral Share Account.

13.2.        No Assets:  No stock, cash
or other property shall be deliverable to an Outside Director in respect of the
Outside Director’s Share Accounts until the date or dates identified pursuant
to Article VIII or Article IX, and an Outside Director’s Share Units shall
be reflected in an unfunded account established for such Outside Director by
the Company.  Payment of the Company’s
obligation with respect to an Outside Director’s Share Accounts shall be from
general funds, and no special assets (stock, cash or otherwise) have been or shall
be set aside as security for this obligation.

13.3.        No Transfers:  An
Outside Director’s rights to payments under Article VIII and/or Article IX are
not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or garnishment by an Outside Director’s
creditors or the creditors of his or her beneficiaries, whether by operation of
law or otherwise, and any attempted sale, transfer, assignment, pledge, or
encumbrance with respect to such payment shall be null and void, and shall be
without legal effect and shall not be recognized by the Company.

13.4.        Unsecured Creditor; No Trust Fund:  The right of an Outside Director to receive
payments under Article VIII and/or Article IX is that of a general, unsecured
creditor of the Company, and the obligation of the Company to make payments
constitutes a mere promise by the Company to pay such benefits in the
future.  Further, the arrangements
contemplated by Article VIII and Article IX are intended to be unfunded for tax
purposes and for purposes of Title I of ERISA.

 10
 

13.5.        Designation of Beneficiary: 
Each Outside Director or former Outside Director entitled to any
payments under Article VIII and/or Article IX from time to time may designate a
beneficiary or beneficiaries to whom any such payments are to be paid in case
of the Outside Director’s death before receipt of any or all of such
payments.  Any designation shall revoke
all prior designations by the Outside Director or former Outside Director,
shall be in a form prescribed by the Company and shall be effective only when
filed by the Outside Director or former Outside Director, during his or her lifetime,
in writing with the Treasurer of the Company. 
References in this Plan to an Outside Director’s “beneficiary” at any
date shall include such persons designated as concurrent beneficiaries on the
director’s beneficiary designation form then in effect.  In the absence of any such designation, any
balance remaining in an Outside Director’s or former Outside Director’s Share
Accounts at the time of the director’s death shall be paid to such Outside
Director’s estate in a lump sum.

13.6.        Plan Expenses:  Any
expenses of administering this Plan shall be borne by the Company.

13.7.        Use of Exercise Proceeds: 
Payment received from Optionees upon the exercise of Options shall be
used for the general corporate purposes of the Company, except that any stock
received in payment may be retired, or retained in the Company’s treasury and
reissued.

13.8.        Indemnification:  In
addition to such other rights of indemnification as they may have as members of
the Board or the Committee, the members of the Committee and the Board shall be
indemnified by the Company against all costs and expenses reasonably incurred
by them in connection with any action, suit or proceeding to which they or any
of them may be party by reason of any action taken or failure to act in
connection with the adoption, administration, amendment or termination of the
Plan, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith; provided that
upon the institution of any such action, suit or proceeding a Committee or
Board member shall, in writing, give the Company notice thereof and an
opportunity, at its own expense, to handle and defend the same before such
Committee or Board member undertakes to handle and defend it on such member’s
own behalf.

13.9.        Withholding Taxes: 
The Company may, in its discretion, require an Outside Director to pay
to the Company at the time of exercise of an Option or issuance of Common Stock
under the Plan the amount that the Company deems necessary to satisfy its
obligation, if any, to withhold Federal, state or local income, FICA or other
taxes incurred by the reason of the exercise or issuance. An Outside Director
shall satisfy the federal, state and local withholding tax obligations arising
in connection with the exercise of an Option or issuance of Common Stock under
the Plan in a manner acceptable to the Committee.

13.10.      No Guarantee Of Tax Treatment: The Company
does not guarantee to any Outside Director or any other person with an interest
in an Option or other entitlement of an Outside Director under the Plan that
any such Option or other entitlement intended to be exempt from Code Section
409A shall be so exempt, or that any Option or other entitlement intended to
comply with Code Section 409A shall so comply, and nothing in this Plan
obligates the 

 11
 

Company or any affiliate to indemnify, defend or hold
harmless any individual with respect to the tax consequences of any such
failure.

ARTICLE
XIV

Effective
Date

14.1.        The
Plan became effective on May 2, 1998 and was amended on May 3, 2003.  The Plan, as further amended, shall become
effective on April 29, 2006.

 12
 

SCHEDULE A TO THE

HARLEY-DAVIDSON, INC.

DIRECTOR STOCK PLAN, AS AMENDED

A Change of
Control Event means any one of the following:

a.     Continuing directors no longer constitute at least two-thirds of
the directors of Harley-Davidson, Inc.  “Continuing
director” means any individual who is either (i) a member of the
Board on May 3, 2003, or (ii) a member of the Board whose election or
nomination to the Board was approved by a vote of at least two-thirds (2/3) of
the Continuing Directors (other than a person whose election was as a result of
an actual or threatened proxy or other control contest);

b.     Any
person or group of persons (as defined in Rule 13d-5 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), together with its
affiliates, becomes the beneficial owner, directly or indirectly, of twenty
percent (20%) or more of the then outstanding common stock of Harley-Davidson,
Inc. or twenty percent (20%) or more of the voting power of the then
outstanding securities of Harley-Davidson, Inc. entitled generally to vote for
the election of the members of the Board;

c.     The
approval by the shareholders of Harley-Davidson, Inc. of the merger or
consolidation of Harley-Davidson, Inc. with any other corporation, the sale of
substantially all of the assets of Harley-Davidson, Inc., or the liquidation or
dissolution, of Harley-Davidson, Inc., unless, in the case of a merger or
consolidation, the then Continuing Directors in office immediately prior to
such merger or consolidation will constitute at least two-thirds (2/3) of the
directors of the surviving corporation of such merger or consolidation and any
parent (as such term is defined in Rule 12b-2 under the Exchange) of such
corporation; or

d.     At
least two-thirds (2/3) of the then Continuing Directors in office immediately
prior to any other action proposed to be taken by the shareholders of
Harley-Davidson, Inc. or by the Board determines that such proposed action, if
taken, would constitute a change of control of Harley-Davidson, Inc. and such
action is taken.

 

 13

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