1990 Stock Option Plan - Harley-Davidson Inc.


                                HARLEY-DAVIDSON, INC.

                                1990 STOCK OPTION PLAN

                         (as amended through August 20, 1997)


                                      ARTICLE I

                                       PURPOSE

     The purpose of the Harley-Davidson, Inc. 1990 Stock Option Plan is to 
provide favorable opportunities for certain selected employees of 
Harley-Davidson, Inc. and its subsidiaries to purchase or receive shares of 
Common Stock of Harley-Davidson, Inc., or to benefit from the appreciation 
thereof. Such opportunities should provide an increased incentive for these 
employees to contribute to the future success and prosperity of 
Harley-Davidson, Inc., thus enhancing the value of the stock for the benefit 
of the shareholders, and increase the ability of Harley-Davidson, Inc. to 
attract and retain individuals of exceptional skill upon whom, in large 
measure, its sustained progress, growth and profitability depend.

                                      ARTICLE II

                                     DEFINITIONS

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

          2.1.  BOARD:  The Board of Directors of Harley-Davidson, Inc.
     
          2.2.  CODE:  The Internal Revenue Code of 1986, as amended.
     
          2.3.  COMMITTEE:  The Human Resources Committee of the Board; 
     provided that if any member of the Human Resources Committee is not both 
     a Disinterested Person and Outside Director, the Committee shall be 
     comprised of only those members of the Human Resources Committee who are 
     both Disinterested Persons and Outside Directors.
     
          2.4.  COMMON STOCK:  The common stock of Harley-Davidson, Inc.
     
          2.5.  COMPANY:  Harley-Davidson, Inc. and any of its Subsidiaries.
     
          2.6.  DISABILITY:  Disability within the meaning of Section 22(e)(3) 
     of the Code, as determined by the Committee.
     
          2.7.  DISINTERESTED PERSONS: Non-employee directors within the 
     meaning of Rule 16b-3 as promulgated under the Securities Exchange Act 
     of 1934, as amended.
     
          2.8.  EMPLOYER:  The entity that employs the employee or Optionee.
     
          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. ISO:  An incentive stock option within the meaning of Section 
     422 of the Code and which is designated as an incentive stock option by 
     the Committee.
     
          2.11. NON-ISO:  A stock option which is not an ISO.
     


          2.12. OPTION:  A stock option granted under the Plan.  Options 
     include both ISOs and Non-ISOs.
     
          2.13. OPTION PRICE:  The purchase price of a share of Common 
     Stock under an Option.
     
          2.14. OPTIONEE:  A person who has been granted one or more 
     Options.
     
          2.15. OUTSIDE DIRECTORS:  Outside Directors within the meaning 
     of Section 162(m) of the Code and the regulations promulgated thereunder.
     
          2.16. PARENT CORPORATION:  The parent corporation, as defined 
     in Section 424(e) of the Code.
     
          2.17. PLAN:  The Harley-Davidson, Inc. 1990 Stock Option Plan.
     
          2.18. RETIREMENT:  Retirement on or after age sixty-two or, 
     with the consent of the Committee, at an earlier age.
     
          2.19. SUBSIDIARY:  A corporation, limited partnership, general 
     partnership, limited liability company, business trust or other entity 
     of which more than fifty percent (50%) of the voting power or ownership 
     interest is directly and/or indirectly held by Harley-Davidson, Inc.
     
          2.20. TERMINATION DATE:  A date fixed by the Committee but not 
     later than the day preceding the tenth anniversary of the date on which 
     the Option is granted.

                                     ARTICLE III

                                    ADMINISTRATION

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

     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 may 
be exercised, 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.

                                      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 7,200,000 provided that Options for not more 
than 400,000 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 of Common Stock, with the result that the 
shares of Common Stock subject to the Option, or portion thereof, that was so 
exercised shall not be available for future grants of Options.

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                                      ARTICLE V

                                     ELIGIBILITY

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

                                      ARTICLE VI

                                   TERM OF OPTIONS

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

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

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

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

     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, or

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

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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. WITHHOLDING TAXES:  The Company may, in its discretion, require an 
Optionee to pay to the Company at the time of exercise the amount that the 
Company deems necessary to satisfy its obligation to withhold Federal, state 
or local income or other taxes incurred by reason of the exercise.  Upon or 
prior to the exercise of an Option requiring tax withholding, an Optionee 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.  Where the exercise of an Option does not give rise to an 
obligation to withhold Federal income taxes on the date of exercise, the 
Company may, in its discretion, require an Optionee to place shares of Common 
Stock purchased under the Option in escrow for the benefit of the Company 
until such time as Federal income tax withholding is required on amounts 
included in the gross income of the Optionee as a result of the exercise of 
an Option.  At such time, the Company, in its discretion, may require an 
Optionee to pay to the Company the amount that the Company deems necessary to 
satisfy its obligation to withhold Federal, state or local income or other 
taxes incurred by reason of the exercise of the Option, in which case the 
shares of Common Stock will be released from escrow to the Optionee. 
Alternatively, subject to acceptance by the Committee, in its sole 
discretion, an Optionee may make a written election to have shares of Common 
Stock held in escrow applied toward the Company's obligation to withhold 
Federal, state or local income or other taxes incurred by reason of the 
exercise of the Option, based on the Fair Market Value of the shares on the 
date of the termination of the escrow arrangement.  Upon application of such 
shares toward the Company's withholding obligation, any shares of Common 
Stock held in escrow and not, in the judgment of the Committee, necessary to 
satisfy such obligation shall be released from escrow to the Optionee.

     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, (b) such Option or portion thereof 
is otherwise exercisable, and (c) the Fair Market Value of a share of Common 
Stock on the date of exercise exceeds the Option Price.

     6.8. NONTRANSFERABILITY OF OPTIONS: Except as may otherwise be provided 
by the Committee, each Option shall, during the Optionee's lifetime, be 
exercisable only by the Optionee, and neither it nor any right hereunder 
shall be transferable otherwise than by will or the laws of descent and 
distribution or be subject to attachment, execution or other similar process. 
In the event of any attempt by the Optionee to alienate, assign, pledge, 
hypothecate or 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.

     6.9. CESSATION OF EMPLOYMENT OF OPTIONEE:

          a.   CESSATION OF EMPLOYMENT OTHER THAN BY REASON OF RETIREMENT,
     DISABILITY OR DEATH.  If an Optionee shall cease to be employed by the
     Company otherwise than by reason of Retirement, Disability, or death, each
     Option held by the Optionee, together with all rights hereunder, shall
     terminate on the date of cessation of employment, to the extent not
     previously exercised.

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

                i. the Termination Date,

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

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

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

     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 
     distribution, to the extent that the Optionee was entitled to exercise such
     Option on the Optionee's date of 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 determined by the
     Committee, 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
     distribution, to the extent that the Option was exercisable at the time of
     cessation of the Optionee's employment.  Any person or persons 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 
     conditions 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 have a limited right of 
surrender allowing the Optionee to surrender that Option within the 30-day 
period following a Change of Control Event and to receive cash, in lieu of 
exercising the Option, in the amount by which the highest 'COC Fair Market 
Value' (as hereinafter defined) of the number of shares of Common Stock 
covered by the Option during the 60 days preceding the date on which the 
Change of Control Event occurs exceeds the exercise price for the shares of 
Common Stock covered by the Option.  For this purpose, the 'COC Fair Market 
Value' of the Common Stock means the closing price of one share of Common 
Stock as reported on the New 

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York Stock Exchange Composite Tape.  If the Common Stock is not listed or 
admitted to trading on the New York Stock Exchange, the COC Fair Market Value 
of the Common Stock shall be the closing price of one share of Common Stock 
on the principal national securities exchange on which the Common Stock is 
listed or admitted to trading, or, if the Common Stock is not listed or 
admitted to trading on any national securities exchange, the last quoted sale 
price or, if not so quoted, the average of the high bid and low asked prices 
in the over-the-counter market of the Common Stock, as reported by the 
National Association of Securities Dealers, Inc. Automated Quotations System 
('NASDAQ') or such other system then in use, or, if on any such date the 
Common Stock is not quoted by any such organization, the average of the 
closing bid and asked prices of the Common Stock as furnished by a 
professional market maker making a market in the Common Stock selected by the 
Board.  If on any such date no market maker is making a market in the Common 
Stock or other Stock, the COC Fair Market Value shall be determined in good 
faith by the Continuing Directors who are not Disinterested Persons.  For 
purposes of this Section 7.2:

          (a)  'Change of Control Event' means any one of the following:  (i) 
     Continuing Directors no longer constitute at least two-thirds 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 then outstanding securities entitled generally 
     to vote for the election 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; and
     
          (b)  'Continuing Director' means any person who either (i) was a 
     Director on November 1, 1989, or (ii) was designated before such 
     person's initial election as a Director as a Continuing Director by a 
     majority of the Continuing Directors.

                                     ARTICLE VIII

                                     ADJUSTMENTS

     8.1. If (a) the Company shall at any time be involved in a transaction 
to which Section 424(a) of the Code is applicable; (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 judgment of the 
Committee necessitates an adjustment to prevent dilution or enlargement of 
the benefits or potential benefits intended to be made available under the 
Plan, then the Committee 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 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 a manner as not to constitute a 'modification' within the 
meaning of Section 424(h)(3) of the Code.  The judgment of the Committee with 
respect to any matter referred to in this Article shall be conclusive and 
binding upon each Optionee.

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                                   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;

           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.

     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.

                                   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.

                                   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.


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     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 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 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 May 6, 1995.


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