1990 Stock Option Plan - Harley-Davidson Inc.


                              HARLEY-DAVIDSON, INC.

                             1990 STOCK OPTION PLAN

                      (as amended through December 9, 1998)

                                    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.

          2.1. 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 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 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 define in Section
424(e) of the Code.

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

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

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

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

                                   ARTICLE III

                                 ADMINISTRATION

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

     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.

                                   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


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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.

                                    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. How ever, 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 al 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 Options 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 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 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 it discretion,
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 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 judgement 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, (s) such Option or portion thereof is otherwise exercisable, and (c) the
Fair Market Value of a share of Common Stock on the date of exercise exceeds the
Option Price.

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

     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.

     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,


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          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 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 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 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 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:


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          (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; 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 contests).

                                  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 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 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. The
judgement 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;

          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;


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          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.

     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 judgement 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.



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                                   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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