Document:

Exhibit 10.2 

HARLEY-DAVIDSON
FINANCIAL SERVICES, INC.
SEVERANCE BENEFITS AGREEMENT  

        THIS
AGREEMENT, entered into as of the 1st day of February, 2007, by and between
HARLEY-DAVIDSON FINANCIAL SERVICES, INC., a Delaware corporation (“Employer”),
and SAIYID T. NAQVI (“Executive”). 

        WHEREAS,
Employer desires to continue to attract and retain skilled and dedicated management
employees; 

        WHEREAS,
Executive is currently employed by Employer in an executive capacity and has unique skills
and abilities that are of benefit to Employer; and 

        WHEREAS,
Employer desires to provide Executive certain assurances regarding severance pay and other
benefits in the event of a Covered Termination (as defined below). 

        NOW,
THEREFORE, in consideration of the premises and other good and valuable consideration, the
parties hereby agree as follows: 

        1.    Not
an Employment Agreement. This Agreement is not an employment           agreement and
shall not change the employment relationship between Employer and           Executive.
Except as expressly provided herein, this Agreement shall not amend           or alter
the terms of, or limit the benefits to Executive under, any existing or           future
employment, transition, change of control or other agreement between           Executive
and Employer. This Agreement shall not be amended by any such future           agreement
unless such future agreement specifically provides that the terms of           this
Agreement shall be amended. Anything in this Agreement to the contrary
          notwithstanding and subject to any existing or future employment or other
          agreement between Employer and Executive, (a) Executive may terminate
          Executive’s employment with Employer at any time and for any reason and
(b)           Employer may terminate Executive’s employment with Employer at any
time and           for any reason.  

        2.    Definitions.  

	 	
a.    Affiliate.
“Affiliate” shall mean any parent, subsidiary or           other affiliate of
Employer.  

	 	
b.    Base
Salary Amount. “Base Salary Amount” shall mean (1) the           amount of
Executive’s average monthly base salary during either (i) if           Executive has
been employed by Employer for twelve (12) or more consecutive           months
immediately prior to the Termination Date, the twelve (12) consecutive           months
immediately prior to the Termination Date or (ii) if Executive has been
          employed by Employer for less than twelve (12) consecutive months immediately
          prior to the Termination Date, the consecutive months of Executive’s
          employment with Employer immediately prior to the Termination Date, multiplied
          by (2) either (i) if Executive has been employed by Employer for twenty four
          (24) or more consecutive months immediately prior to the Termination Date,
          twelve (12) or (ii) if Executive has been employed by Employer for less than
          twenty four (24) consecutive months immediately prior to the Termination Date,
          six (6).  

	 	
c.    Benefit
Period. “Benefit Period” shall mean (1) if Executive           has been
employed by Employer for twenty four (24) or more consecutive months
          immediately prior to the Termination Date, the twelve (12) consecutive months
          immediately following the Termination Date or (2) if Executive has been
employed           by Employer for less than twenty four (24) consecutive months
immediately prior           to the Termination Date, the six (6) consecutive months
immediately following           the Termination Date.  

	 	
d.    Cause.
“Cause” shall mean:  

	 	        (1)              the
conviction of Executive of a felony or a crime involving moral turpitude,           theft
or fraud; or  

	 	        (2)              Executive’s
refusal to perform duties as directed in good faith by           Executive’s
supervisor, which failure is not cured within 10 days after           written notice
thereof from Employer to Executive; or  

	 	        (3)              Executive’s
engaging in sexual harassment or any act involving theft or           fraud with respect
to Employer or any of its parents, subsidiaries or other           affiliates, as
determined by the Chief Executive Officer of Employer; or  

	 	        (4)              Executive’s
reckless conduct or willful misconduct which results in           substantial harm (in
relation to Executive’s annual compensation), as           determined by the Chief
Executive Officer of Employer, whether financial,           reputational or otherwise, to
Employer or any of its parents, subsidiaries or           other affiliates.  

	 	
e.    Covered
Termination. “Covered Termination” shall mean           Employer’s
termination of Executive’s employment with Employer other           than (1) for
Cause or (2) in connection with the death or disability of           Executive.
Notwithstanding the foregoing, the transfer of Executive’s           employment to
any Affiliate shall not be a Covered Termination.  

	 	
f.    Disability.
“Disability” shall have the meaning assigned to it           in the long-term
disability insurance policy then provided or made available to           Executive by or
through Employer. If there is then no such policy or such term           is not defined
therein, then “Disability” shall mean Executive’s           incapacity due
to physical or mental illness causing Executive to be absent from           the full-time
performance of Executive’s duties with Employer for sixty           (60) consecutive
days.  

	 	
g.    Stock
Plans. “Stock Plans” shall mean the Employer’s           Amended 2004
Incentive Stock Plan, the Employer’s 1995 Stock Option Plan,           as amended,
and any other existing or future plans for the issuance of stock           options, stock
appreciation rights or restricted stock.  

-2- 

	 	
h.    Termination
Date. “Termination Date” shall mean the date on           which a Covered
Termination is effective, which date shall not be less than           twenty-five (25)
days after the date the Termination Notice is delivered to           Executive.  

	 	
i.    Termination
Notice Date. “Termination Notice Date” shall mean           the date on
which written notice is delivered by Employer to Executive stating           that the
Executive’s employment is being terminated pursuant to a Covered
          Termination and setting forth the Termination Date.  

        3.    Severance
Benefits. In the event of a Covered Termination and in lieu of           any benefits
or other amounts that would otherwise be payable by Employer to           Executive as a
result of, arising out of or following such Covered Termination,           Executive
shall be entitled to all of the following:  

	 	
a.              a
lump sum payment, payable within thirty (30) days following the Termination
          Date, equal to the Base Salary Amount.  

	 	
b.              during
the Benefit Period or the period beginning on the Termination Date and           ending
on the date Executive becomes employed on a substantially full-time           basis,
whichever is shorter, Employer shall make available to Executive coverage           under
Employer’s medical, dental and life insurance plans (but not short or           long
term disability) on the same terms as such plans are made available to           Employer’s
salaried employees generally.  

	 	
c.              during
the Benefit Period or the period beginning on the Termination Date and           ending
on the date Executive becomes employed on a substantially full-time           basis,
whichever is shorter, Employer shall maintain any life insurance on           Executive’s
life owned by Employer and shall pay the premiums (for such           period) due on any
life insurance on Executive’s life owned by Executive.  

	 	
d.              any
other benefits payable pursuant to the terms of the Stock Plans (and           applicable
agreements thereunder) and any incentive compensation (including           STIP),
pension, 401(k), retirement, savings or deferred compensation plans           earned up
to Termination Date.  

	 	
e.              reimbursement
of any expenses incurred by Executive in the ordinary course of           employment
prior to the Termination Date consistent with Employer’s then           existing
expense reimbursement policy.  

        4.    No
Mitigation. Executive shall not be required to mitigate the amount of           any
payment or benefit provided for in Section 3 hereof by seeking other           employment
or otherwise, nor will the amount provided for in Section 3(a) hereof           be
reduced by any compensation earned by Executive as a result of employment by
          another employer after the Termination Date.  

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        5.    Exclusivity.  

	 	        a.              The
benefits provided for herein are intended to constitute a minimum, but
          noncumulative, benefit package for Executive in the event of a Covered
          Termination. If Executive has or claims to have any Claims (as defined below),
          Executive may elect to assert such Claims. If, however, Executive does formally
          assert one or more Claims in a writing submitted to Employer, or an appropriate
          body to determine such Claims, for the legal enforcement of such Claims, such
          writing shall constitute an irrevocable waiver and disclaimer of
          Executive’s benefits and rights under this Agreement.  

	 	        b.              As
a condition of receiving the benefits provided for herein, Executive shall be
          required to execute, prior to receiving any benefits hereunder, a release in a
          form reasonably satisfactory to Employer, of all other claims against Employer
          arising out of such Covered Termination (the “Claims”), including but
          not limited to any and all claims arising out of contract (written, oral, or
          implied in law or in fact), tort (including negligent and intentional acts), or
          state, federal or local law (including discrimination on any basis whatsoever);
          a reaffirmation of the Executive’s confidentiality agreement; a
          non-solicitation of other employees; and a non-compete agreement effective
          during the Benefit Period.  

	 	        c.              If
Executive has received benefits under this Agreement for a Covered           Termination
and thereafter asserts any Claims, Executive shall, notwithstanding           any other
agreement to the contrary, return to Employer all benefits received           hereunder
as a condition of being allowed to assert any such Claims. If for any           reason
Executive cannot legally be compelled to return such benefits, Employer           shall
be given, to the extent allowed by law, credit for all amounts received by
          Executive under this Agreement against any other amounts otherwise due to
          Executive arising out of any such Claims. Notwithstanding the foregoing, this
          Section 5(c) shall not be construed to limit or otherwise modify the terms of
          any release executed by Executive pursuant to Section 5(b) hereof or otherwise.  

        6.    Other
Termination. In the event Executive’s employment with Employer
          terminates other than pursuant to a Covered Termination, including without
          limitation, a termination for Cause, termination by reason of Executive’s
          death, Disability or retirement or a voluntary termination by Executive,
          Executive shall be entitled to no benefits or rights under this Agreement.  

        7.    Amendment,
Termination and Assignment. This Agreement may be amended,           terminated or
superseded only by a written instrument signed by Executive and           Employer. This
Agreement may not be assigned by Executive. Notwithstanding           anything in this
Agreement to the contrary, Employer may unilaterally amend this           Agreement to
make changes that Employer reasonably determines are necessary or           appropriate
for purposes of causing this Agreement to comply with the           requirements of
Section 409A of the Internal Revenue Code and regulations           proposed or
promulgated thereunder, so long as Employer makes the same changes           to
corresponding agreements to which other Employer executives are parties.  

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        8.    Transfer
of Employment. If Executive’s employment is transferred to           any
Affiliate, such Affiliate shall assume Employer’s obligations hereunder
          and following such transfer such Affiliate shall be deemed the           “Employer” for
purposes of this Agreement.  

        9.    Headings.
Headings used herein are for convenience only and shall not           constitute a part
of or affect the meaning or interpretation of this Agreement.  

        10.    Governing
Law; Venue. This Agreement shall be deemed to have been made           and executed
in the State of Wisconsin and the validity, interpretation and           enforcement
hereof shall be governed by the internal laws of the State of           Wisconsin. In the
event of any dispute arising from or in connection with this           Agreement,
Executive consents and agrees to in personam           jurisdiction
and to venue exclusively in either the Circuit Court for Milwaukee           County,
Wisconsin, or the United States District Court for the Eastern District           of
Wisconsin, located in Milwaukee, Wisconsin.  

        IN
WITNESS WHEREOF, the parties have executed this Agreement at Milwaukee, Wisconsin as of
the date first above written. 

	EXECUTIVE:	EMPLOYER:
	
 	HARLEY-DAVIDSON FINANCIAL
		SERVICES, INC.
	

/s/ Saiyid T. Naqvi	By:  /s/ James L. Ziemer
	Saiyid T. Naqvi

-5-Exhibit 10.3 

HARLEY-DAVIDSON, INC. 

1995 STOCK OPTION PLAN 

(as amended through
April 28, 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               CAUSE:
(i) the Optionee’s conviction of a felony or a plea by the Optionee
               of no contest to a felony, (ii) willful misconduct on the part of the
Optionee                that is materially and demonstrably detrimental to the Company,
(iii) the                Optionee’s willful refusal to perform requested duties
consistent with his                or her office, position or status with the Company
(other than as a result of                his or her physical or mental disability) or
(iv) other conduct or inaction that                the Company determines in its
discretion constitutes Cause. With respect to                clauses (ii), (iii) and (iv)
of this definition, Cause shall be determined by                the senior human
resources officer of the Company. All determinations of such                officer under
this definition shall be final.  

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

	 	
2.4.
            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.  

	 	
2.5.
 COMMON STOCK: The common stock of Harley-Davidson, Inc.  

	 	
2.6.
          COMPANY: Harley-Davidson, Inc. and any of its Subsidiaries.  

	 	
2.7.
           DISABILITY: Disability within the meaning of Section 22(e)(3) of the Code, as
          determined by the Committee.  

	 	
2.8.
           DISINTERESTED PERSONS: Non-employee directors within the meaning of Rule 16b-3
          as promulgated under the Securities Exchange Act of1934, as amended.  

	 	
2.9.
EMPLOYER: The entity that employs the employee or Optionee.  

	 	
2.10.
           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.  

	 	
2.11.
           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.  

	 	
2.12.
           NON-ISO: A stock option which is not an ISO.  

	 	
2.13.
           OPTION: A stock option granted under the Plan. Options include both ISOs and
          Non-ISOs.  

	 	
2.14.
           OPTION PRICE: The purchase price of a share of Common Stock under an Option.  

	 	
2.15.
           OPTIONEE: A person who has been granted one or more Options.  

	 	
2.16.
           OUTSIDE DIRECTORS: Outside Directors within the meaning of Section 162(m) of
          the Code and the regulations promulgated thereunder.  

	 	
2.17.
           PARENT CORPORATION: The parent corporation, as defined in Section 424(e) of
the           Code.  

	 	
2.18.
           PLAN: The Harley-Davidson, Inc. 1990 Stock Option Plan.  

	 	
2.19.
           RETIREMENT: Termination of employment from the Company (i) on or after age
          sixty-two (62); (ii) for reasons other than Cause, on or after age fifty-five
          (55) if the Optionee has completed five (5) years of service with the Company
at           the time of such termination; or (iii) with the consent of the Committee,
under           other circumstances. For purposes of this definition, an Optionee’s
years           of service with the Company shall be determined in the same manner as is
          specified in the Retirement Annuity Plan for Salaried Employees of
          Harley-Davidson (as it may be amended), whether or not the Optionee is covered
          under such plan.  

2 

	 	
2.20.
           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.  

	 	
2.21.
            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.  

	 	
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.  

3 

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 thereof shall be exercisable after
the           Termination Date.  

4 

	 	
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.  

	 	
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.  

5 

	 	
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. 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,  

6 

	 	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 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:  

7 

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

	 	
(i)
            Continuing Directors no longer constitute at least two-thirds of the
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:  

	 	
(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).  

8 

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 

	 	
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;  

9 

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

10 

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.  

11

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