1998 Director Stock Plan

HARLEY-DAVIDSON, INC.


1998 DIRECTOR STOCK PLAN
As Amended


ARTICLE I


Purpose


The purpose of the Harley-Davidson, Inc. 1998 Director Stock Plan is to provide favorable opportunities for non-employee directors of Harley-Davidson, Inc. to purchase shares of Common Stock of Harley-Davidson, Inc., or to benefit from the appreciation thereof. Such opportunities should provide an increased incentive for these directors 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 increasing the ability of Harley-Davidson, Inc. to attract and retain individuals 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 on the Board as voted by the Board, exclusive of (a) any Board or committee meeting fees and (b) any Committee Chair Retainer Fees.


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 Human Resources Committee of the Board; provided that if any member of the Human Resources Committee is not a Disinterested Person, the Committee shall be comprised of only those members of the Human Resources Committee who are Disinterested Persons.


2.5. Committee Chair Retainer Fee: The annual retainer fee then in effect for service as chairman of a committee of the Board as voted by the Board.


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


2.7. Company: Harley-Davidson, Inc.


2.8. Disinterested Persons: Non-employee 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. 1998 Director Stock Plan.


2.15. Share Election: An election by an Outside Director to receive either 0%, 50% or 100% of his or her Annual Retainer Fee and his or her Committee Chair Retainer Fee (if any) to be paid in each calendar year in the form of Common Stock, 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 Amount and Committee Chair Retainer Fee (if any).


2.16. 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.


2.17. 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. The foregoing amount 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 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.


ARTICLE V


Eligibility


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


ARTICLE VI


Options


6.1. Option Grants: Each Outside Director who serves as a member of the Board immediately following an annual meeting of shareholders of the Company shall automatically be granted on the first business day after such meeting (the "Grant Date") an Option for the pu ...