Document:

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: The average of the high and low reported sales prices           of
Common Stock on the New York Stock Exchange Composite Tape on the date for
          which fair market value is being determined.  

        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.  

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.  

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        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.  

        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.  

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        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 payment           of the
full price of the shares being purchased pursuant to the Option. An           Optionee
may exercise an Option with respect to less than the full number of           shares for
which the Option may then be exercised, but an Optionee must exercise           the
Option in full shares of Common Stock. The price of Common Stock purchased
          pursuant to an Option, or portion thereof, may be paid:  

            a.              in
United States dollars in cash or by check, bank draft or money order payable           to
the order of the Company,  

            b.              through
the delivery of shares of Common Stock with an aggregate Fair Market           Value on
the date of exercise equal to the Option Price,  

            c.              by
complying with other procedures for the payment of the exercise price that           the
Company may establish from time to time in accordance with applicable law           and
regulations, or  

            d.              by
any combination of the above methods of payment.  

The Committee shall determine
acceptable methods for tendering Common Stock as payment upon exercise of an Option and
may impose such limitations and prohibitions on the use of Common Stock to exercise an
Option as it deems appropriate, including, without limitation, any limitation or
prohibition designed to avoid certain accounting consequences which may result from the
use of Common Stock as payment upon exercise of an Option. 

        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.  

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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 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.  

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        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 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 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.  

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            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.  

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        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 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.  

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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
declare a dividend payable in, or shall subdivide or combine, its           Common Stock;
or (c) any other event shall occur which in the judgement 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 may, 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 Outside Director and
          preserve, without exceeding, the value of such Options and Outside
          Director’s Share Accounts. The judgment of the Committee with respect to
          any matter referred to in this Article shall be conclusive and binding upon
each           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 Optionee’s consent, alter or impair any of the rights or
          obligations under any Option theretofore granted to an Optionee under the Plan.  

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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.  

        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.  

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        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 to withhold Federal, state or local income, FICA or other           taxes
incurred by the reason of the exercise or issuance. Upon or prior to the
          exercise of an Option or receipt of Common Stock requiring tax withholding, an
          Outside Director may make a written election to have shares of Common Stock
          withheld by the Company from the shares otherwise to be received. The number of
          shares so withheld shall have an aggregate Fair Market Value on the date of
          exercise sufficient to satisfy the applicable withholding taxes. The acceptance
          of any such election by an Optionee shall be at the sole discretion of the
          Committee.  

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.  

-11- 

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.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 (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.  	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.

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