SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only (as
permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
HARLEY-DAVIDSON, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[PRELIMINARY COPY]
[LOGO]
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
Harley-Davidson, Inc.
3700 West Juneau Avenue
Milwaukee, Wisconsin 53208
(414) 342-4680
March 31, 1995
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of
Harley-Davidson, Inc., I cordially invite you to attend the 1995 Annual
Meeting of Shareholders of Harley-Davidson, Inc. to be held at 10:30 a.m.,
local time, on Saturday, May 6, 1995 at the Century Center, 120 South
Saint Joseph Street, South Bend, Indiana.
The attached Notice of Annual Meeting and Proxy Statement describe
the formal business to be transacted at the Meeting. During the Meeting,
there will be brief reports on the operations of the Company. Once the
business of the Meeting has been concluded, shareholders will be given the
opportunity to ask questions.
We sincerely hope you will be able to attend our 1995 Annual Meeting.
However, whether or not you are personally present, it is important that
your shares be represented. ACCORDINGLY, PLEASE MARK, SIGN, DATE AND MAIL
YOUR PROXY CARD IN THE ENCLOSED ENVELOPE PROVIDED FOR THIS PURPOSE.
Sincerely yours,
Vaughn L. Beals, Jr.
Chairman
<PAGE>
[LOGO]
Notice of Annual Meeting of Shareholders
May 6, 1995
The 1995 Annual Meeting of Shareholders (the "Annual Meeting") of
Harley-Davidson, Inc. (the "Company") will be held at the Century Center,
120 South Saint Joseph Street, South Bend, Indiana, on May 6, 1995 at
10:30 a.m., local time, for the following purposes:
1. To elect two directors for a three-year term to expire at
the Company's 1998 Annual Meeting of Shareholders;
2. To approve the adoption of the Company's 1995 Stock Option
Plan;
3. To approve an amendment to the Company's Restated Articles
of Incorporation to increase the total number of authorized shares of
common stock from 100,000,000 to 200,000,000;
4. To ratify the selection of Ernst & Young LLP, independent
public accountants, to audit the annual financial statements of the
Company for the year ending December 31, 1995; and
5. To take action upon any other business as may properly come
before the Annual Meeting and any adjournment thereof.
The Board of Directors of the Company has fixed the close of business
on March 16, 1995 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof.
By Order of The Board of Directors,
Timothy K. Hoelter
Secretary
Milwaukee, Wisconsin
March 31, 1995
YOUR VOTE IS IMPORTANT,
NO MATTER HOW MANY SHARES YOU OWNED
ON THE RECORD DATE.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD AND
SIGN, DATE AND RETURN IT IN THE ENVELOPE PROVIDED WHICH IS ADDRESSED FOR
YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN
ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE COMPANY OF FURTHER
SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
<PAGE>
[LOGO]
3700 West Juneau Avenue
Milwaukee, Wisconsin 53208
March 31, 1995
____________________
PROXY STATEMENT
____________________
The proxy accompanying this Proxy Statement is solicited by the Board
of Directors (the "Board") of Harley-Davidson, Inc. (the "Company") for
use at the 1995 Annual Meeting of Shareholders of the Company to be held
on May 6, 1995 and at any adjournment thereof (the "Annual Meeting").
This Proxy Statement and the accompanying proxy were first sent to
shareholders on or about March 31, 1995.
The only outstanding class of voting securities of the Company is its
Common Stock (the "Common Stock"). On March 16, 1995, the record date for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting, ___________________ shares of Common Stock were
outstanding. Holders of the Common Stock are entitled to one vote per
share on all matters.
Shareholders who execute proxies may revoke them at any time prior to
the voting thereof by delivery of a subsequently dated proxy or written
notice (1) to the Secretary of the Company at the Company's address shown
above on or before May 5, 1995 or (2) to the secretary of the Annual
Meeting at the Annual Meeting. Unless so revoked, the shares represented
by proxies received by the Board will be voted at the Annual Meeting.
Where a shareholder specifies a choice by means of the ballot provided in
the proxy, the shares will be voted in accordance with such specification.
Effective November 28, 1994, substantially all of the assets and
operations of the Motorcycle Division of the Company was transferred to
Harley-Davidson Motor Company, a new subsidiary of the Company. As used
in this Proxy Statement, "Motor Company" refers to the Motorcycle Division
prior to the transfer and to Harley-Davidson Motor Company after the
transfer.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 16,
1995 with respect to the Common Stock ownership of each director, the
Chief Executive Officer, the four other executive officers of the Company
identified in the Summary Compensation Table below (collectively with the
Chief Executive Officer, the "named executive officers") and all directors
and executive officers as a group. No person or group of persons is known
by the Company to own beneficially more than 5% of the Common Stock of the
Company.
Amount and Nature of
Beneficial
Ownership(1)(2)
Shares Issuable
Percent Upon Exercise
Number of of of Stock
Name of Beneficial Owner Shares Class Options(3)
Barry K. Allen . . . . . . . 2,000 * 0
William F. Andrews . . . . . 4,000 * 0
Vaughn L. Beals, Jr. . . . . 503,010(4) * 0
Jeffrey L. Bleustein . . . . 387,557 * 117,268
Thomas A. Gelb . . . . . . . 118,806 * 42,274
C. William Gray . . . . . . . 42,596(5) * 40,330
Richard J. Hermon-Taylor . . 4,000 * 0
Donald A. James . . . . . . . 20,000(6) * 0
Richard G. LeFauve . . . . . 1,000 * 0
James A. Norling . . . . . . 2,000 * 0
William B. Potter . . . . . . 0 .00% 0
Martin R. Snoey . . . . . . . 9,042 * 8,032
Richard F. Teerlink . . . . . 1,009,426 1.32% 552,600
All Directors and Executive
Officers as a
Group (16 Individuals) . . 2,578,462 3.35% 909,332
______________________
* The amount shown is less than 1% of the outstanding shares of Common
Stock.
(1) Except as otherwise noted, all persons have sole voting and
investment power over the shares listed.
(2) Includes shares of Common Stock issuable upon the exercise of stock
options exercisable within 60 days of March 16, 1995.
(3) Only includes stock options exercisable within 60 days of March 16,
1995. Directors who are not employees of the Company are not
eligible to receive stock options under the Company's stock option
plans.
(4) Includes 190,380 shares of Common Stock held by Mr. Beals' wife. Mr.
Beals has shared voting and investment power over such shares.
(5) Includes 20 shares of Common Stock held by Mr. Gray's children. Mr.
Gray has shared voting and investment power over such shares.
(6) Includes 20,000 shares of Common Stock held by Fred Deeley Imports
Ltd. Mr. James has sole voting power and shared investment power
over such shares.
1--ELECTION OF DIRECTORS
The Restated Articles of Incorporation of the Company provide for a
Board of not less than six (6) nor more than fifteen (15) members, as
determined from time to time by the affirmative vote of a majority of the
Directors then in office. The Board is divided into three classes, with
one class of Directors elected each year for a term of three years.
The Board currently consists of nine members, three of whom have
terms that expire at the Annual Meeting (Class I Directors), three of whom
have terms that expire at the 1996 annual meeting of shareholders (Class
II Directors) and three of whom have terms that expire at the 1997 annual
meeting of shareholders (Class III Directors). William B. Potter, who is
a Class I Director, will retire as a director upon the expiration of his
current term at the Annual Meeting. The Board has acted to reduce the
size of the Board to eight members effective as of the expiration of the
current term for Class I Directors at the Annual Meeting.
The two nominees for director set forth below, both of whom are
currently Class I Directors, are proposed to be elected at the Annual
Meeting to serve until the 1998 annual meeting of shareholders. The
remaining six directors will continue to serve as members of the Board for
terms as set forth below. Both nominees have advised the Company that
they will serve if elected. Directors are elected by a plurality of the
votes cast (assuming a quorum is present at the Annual Meeting). Thus,
any shares not voted, whether due to abstentions or broker nonvotes, will
not have an impact on the election of directors. A quorum consists of a
majority of the shares entitled to vote represented at the Annual Meeting
in person or by proxy, including proxies reflecting abstentions or broker
nonvotes. Broker nonvotes arise from proxies delivered by brokers and
others where the record holder has not received authority to vote on one
or more matters. Once a share is represented at the Annual Meeting, it
will be deemed present for quorum purposes throughout the Annual Meeting
(including any adjournment thereof unless a new record date is or must be
set for such adjournment). Proxies solicited by the Board will be voted
"FOR" the following nominees unless a shareholder specifies otherwise.
Should any such nominee become unable to serve, proxies may be voted for
another person designated by the Board.
THE BOARD RECOMMENDS A VOTE "FOR" THE FOLLOWING NOMINEES.
The names, ages as of March 16, 1995, and principal occupations for
the past five years of each of the directors and nominees and the names of
any other public companies of which each is presently serving as a
director are set forth below:
Nominees For Class I Directors--Terms Expiring at 1998 Annual Meeting
Barry K. Allen, 46, has been a director of the Company since 1992.
He is currently President and Chief Operating Officer and a director of
Marquette Electronics, Inc., a manufacturer of medical equipment and
systems. From July 1993 to September 1993 he was President of Illinois
Bell, Inc., a provider of communications and information services to
Illinois customers, and from 1989 to July 1993 he was President and Chief
Executive Officer of Wisconsin Bell, Inc., a provider of communications
and information services to Wisconsin customers. Mr. Allen is also a
director of Banta Corporation.
Richard G. LeFauve, 60, has been a director of the Company since
December 1993. He has been Group Executive, NAO Small Car Group of
General Motors Corporation, an automobile manufacturer, since 1994,
President of Saturn Corporation, an automobile manufacturer, since 1986
and a Vice President of General Motors Corporation since 1985.
Class II Directors--Terms Expiring at 1996 Annual Meeting
William F. Andrews, 63, has been a director of the Company since
1990. Mr. Andrews has been the Chairman of Schrader Inc., a manufacturer
of valves, since March 1995. He was a consultant with the investment
banking firm Investor (USA) International (formerly known as Instoria
Providentia, Inc.) from 1992 to 1994, Chairman and Chief Executive Officer
of Amdura Corp., a specialty manufacturer of products for the overhead
lifting and waste recycling and disposal markets, from 1993 to 1994 and
Chairman of Utica Corp., a manufacturer of precision-forged turbine
airfoils for both aircraft and land-based engines, from 1993 to 1994.
From 1990 to 1991, he was President and Chief Executive Officer of UNR
Industries, Inc., a diversified manufacturer of steel products. From 1990
to 1991 Mr. Andrews was President of Massey Investment Company, a private
investment company, and from 1986 to 1989 was Chairman and Chief Executive
Officer of Singer Sewing Machine Company, a producer of sewing machines,
furniture and consumer durables. Mr. Andrews is also a director of
Navistar, Inc., Southern New England Telephone Company, Corrections
Corporation of America, Johnson Controls, Inc., Katy Industries, Inc., MB
Communications, Inc. and Northwestern Steel & Wire Corporation.
Richard J. Hermon-Taylor, 53, has been a director of the Company
since 1986. He has been President of BioScience International, Inc., a
technology transfer company, since 1987, and a Vice President of
Symmetrix, Inc., a business consulting firm, since March 1994. From 1990
to 1992 he was Chief Executive Officer of Tonometrics, Inc., a
manufacturer of medical devices. Mr. Hermon-Taylor is also a director of
Alliance Technology Fund, Inc.
Richard F. Teerlink, 58, has been a director of the Company since
1982. He has been Chief Executive Officer of the Company since 1989 and
President of the Company since 1988. He is also a director of Johnson
Controls, Inc. and Outboard Marine Corporation.
Nominees for Class III Directors--Terms Expiring at 1997 Annual Meeting
Vaughn L. Beals, Jr., 67, has been a director and Chairman of the
Board of the Company since 1981. He served as Chief Executive Officer of
the Company from 1981 until his retirement in 1989.
Donald A. James, 51, has been a director of the Company since 1991.
Mr. James is a co-founder and has been the Vice Chairman and Chief
Executive Officer of Fred Deeley Imports Ltd., the largest independent
motorcycle distributorship in Canada and the exclusive distributor of the
Company's motorcycles in that country, since 1989. From 1981 to 1989 he
served as President of Fred Deeley Imports Ltd.
James A. Norling, 53, has been a director of the Company since
December 1993. Mr. Norling has served as President, Europe, Middle East
and Africa and as Chairman, European Management Board for Motorola, Inc.,
a manufacturer of electronics, since April 1993 and as an Executive Vice
President of Motorola, Inc. since 1990. From 1990 to April 1993 he was
President and General Manager of Motorola's Semiconductor Products Sector
and from 1986 to 1990 was Executive Vice President and General Manager of
Motorola's Semiconductor Products Sector.
Committees of the Board
The Board has three committees: the Audit Committee, the Human
Resources Committee and the Nominating and Director Affairs Committee.
The Audit Committee, the current members of which are Barry K. Allen,
William F. Andrews (Chairman), Richard J. Hermon-Taylor, Donald A. James,
Richard G. LeFauve, James A. Norling and William B. Potter, met two times
during 1994. The Audit Committee selects, subject to shareholder
ratification, and engages independent public accountants to audit the
books, records and accounts of the Company. The Audit Committee also
determines the scope of such audits and reviews the adequacy of the
internal accounting controls of the Company.
The Human Resources Committee, the current members of which are Barry
K. Allen (Chairman), William F. Andrews, Richard G. LeFauve and James A.
Norling, met three times during 1994. The Human Resources Committee
approves certain compensation and benefits actions, reviews performance of
senior management and advises management on matters of succession
planning, career development and human resources strategies.
The Nominating and Director Affairs Committee, the current members of
which are Barry K. Allen (Chairman), William F. Andrews, Richard J.
Hermon-Taylor, Donald A. James, Richard G. LeFauve, James A. Norling and
William F. Potter, met three times during 1994. The Nominating Committee
identifies and recommends to the full Board candidates for service on the
Board and reviews Board performance. Shareholders may recommend
candidates by writing to the Nominating and Director Affairs Committee in
care of the Secretary of the Company. Such recommendations for the 1996
annual meeting of shareholders must be received by the Company on or
before December 4, 1995. Any shareholder who desires to nominate directly
a director candidate for consideration by the shareholders must give
written notice thereof to the Secretary of the Company in advance of the
applicable meeting in compliance with the terms and within the time
periods specified in the Company's Restated Articles of Incorporation.
The Board met six times during 1994. All directors attended at least
75% of the meetings of the Board and the Board committees on which they
served during 1994.
Directors who are employees of the Company do not receive any special
compensation for their services as directors. Except for Mr. Beals,
directors who are not employees of the Company received in 1994 an annual
fee of $25,000 plus $1,500 for each regular meeting of the Board and $750
for each Audit Committee meeting and each Human Resources Committee
meeting. The Company reimburses directors for any travel expenses
incurred in connection with attendance at Board or Board committee
meetings.
The Company has a consulting contract with Mr. Beals pursuant to
which Mr. Beals is paid $242,240 per year. The consulting term expires
June 30, 1998. The consulting contract also provides for supplemental
retirement benefits of $159,840 per year after the consulting term expires
until his death. In the event of Mr. Beals' death prior to the end of the
consulting term, the consulting agreement provides, as a death benefit,
the continuation of certain payments under the consulting agreement
through July 1, 1999.
EXECUTIVE COMPENSATION
The following table shows the aggregate compensation, including
incentive compensation, paid by the Company for 1994, 1993 and 1992 to the
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company for 1994:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation Compensation
Other Awards All
Annual Securities Other
Compensa- Underlying Compensa-
Name and Principal Position Year Salary($) Bonus($) tion ($) Options(#) tion($)<F1>
<S> <C> <C> <C> <C> <C> <C>
Richard F. Teerlink
President and Chief
Executive Officer . . . . 1994 440,901 700,000 39,481 100,000 27,541
President and Chief
Executive Officer . . . . 1993 425,672 546,000 35,072 0 24,038
President and Chief
Executive Officer . . . . 1992 397,926 283,161 31,506 100,000 7,081
Jeffrey L. Bleustein
President and Chief
Operating Officer--
Motor Company . . . . . . 1994 283,257 265,297 35,866 50,000 23,553
President and Chief
Operating Officer--
Motor Company . . . . . . 1993 275,004 301,624 32,249 0 8,129
President and Chief
Operating Officer--
Motor Company . . . . . . 1992 229,171 112,701 20,486 40,888 2,882
Thomas A. Gelb
Vice President,
Continuous Improvement . . 1994 250,839 194,834 26,533 40,000 18,302
Vice President,
Continuous Improvement . . 1993 239,442 218,850 23,778 0 14,157
Vice President,
Continuous Improvement . . 1992 222,292 109,013 21,103 40,000 3,879
C. William Gray
Vice President, Human
Resources . . . . . . . . 1994 175,129 136,190 22,173 19,140 34,227
Vice President, Human
Resources--
Motor Company . . . . . . 1993 165,881 151,615 21,025 0 31,381
Vice President, Human
Resources--
Motor Company . . . . . . 1992 158,674 78,845 11,945 15,644 26,122
Martin R. Snoey<F2>
President and Chief
Operating Officer--
Holiday Rambler . . . . . 1994 181,462 126,672 28,798 20,128 30,139
President and Chief
Operating Officer--
Holiday Rambler . . . . . 1993 161,538 52,500 35,289 6,000 51,644
____________________
<FN>
<F1> The 1994 amounts for Messrs. Teerlink, Bleustein, Gelb and Gray
include the value of split dollar life insurance provided by the
Company, a 401(k) matching contribution of $4,204 and a Motor Company
non-qualified deferred compensation plan matching contribution of
$11,375, $11,763, $6,552 and $4,716, respectively. The 1994 amount
for Mr. Gray also includes $20,000 of loan forgiveness and $3,039 of
imputed interest relating to an interest free relocation loan. The
1994 amount for Mr. Snoey includes the value of split dollar life
insurance provided by the Company, a 401(k) matching contribution of
$4,500 and $24,401 of relocation expense reimbursements.
<F2> Mr. Snoey joined the Company in 1993.
</TABLE>
Stock Option Plans
Stock options have been granted to executive officers and other key
employees of the Company pursuant to the Company's 1986 Stock Option Plan,
the Company's 1988 Stock Option Plan and the Company's 1990 Stock Option
Plan which are administered by the Human Resources Committee. During
1994, options to purchase shares of Common Stock were granted under the
Company's 1990 Stock Option Plan to the Chief Executive Officer and the
other named executive officers as follows:
<TABLE>
OPTION GRANTS IN 1994
<CAPTION>
Potential Realizable Value at Assumed Annual
Rates of Stock Appreciation for
Individual Grants <F1> Option Term <F2>
Number of Percent of
Securities Total
Underlying Options Exercise
Options Granted to Price Expiration
Name Granted Employees ($/Sh) Date 0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Richard F. Teerlink . . 100,000 13.7% $24.34 2/15/04 $ 0 $1,530,200 $3,877,521
Jeffrey L. Bleustein . 50,000 6.9 24.34 2/15/04 0 765,100 1,938,760
Thomas A. Gelb . . . . 40,000 5.5 24.34 2/15/04 0 612,080 1,551,008
C. William Gray . . . . 19,140 2.6 24.34 2/15/04 0 292,880 742,157
Martin R. Snoey . . . . 20,128 2.8 24.34 2/15/04 0 307,999 780,467
All Optionees . . . . . 728,410 100.0 <F3> <F3> 0 11,161,815 28,286,231
All Shareholders . . . N/A N/A N/A N/A 0 1,164,271,221<F4> 2,950,491,865<F4>
____________________
<FN>
<F1> Options granted under the Stock Option Plans are non-qualified stock
options. The option price per share is 100% of the fair market value
of a share of common stock on the date of the grant. The Human
Resources Committee has the authority to grant options and set or
amend the terms and conditions of the option agreements. The
exercise price of an option may be paid in cash, shares of common
stock or a combination of cash and stock (subject to the conditions
that may be set by the Human Resources Committee). The options may
be exercised one year after the date of grant, not to exceed 25% of
the shares in the first year, with an additional 25% to be
exercisable in each of the following years. Each option granted
under the 1990 Stock Option Plan has a limited right which permits
the holder to surrender the option within 30 days after a change of
control of the company and receive the difference between the
exercise price of the option and the highest closing price of the
Common Stock during the 60-day period preceding the change of control
of the Company.
<F2> The dollar amounts under these columns are the results of
calculations at 0% and at the 5% and 10% rates set by the Securities
and Exchange Commission and therefore are not intended to forecast
possible future appreciation, if any, in the market price of the
Common Stock.
<F3> Options granted with exercise prices from $24.34 to $26.16 and
expiration dates from 2/15/04 to 8/16/04.
<F4> Represents corresponding gain to all shareholders on 76,059,892
shares of Common Stock outstanding calculated based on fair market
value of such Common Stock on February 16, 1994.
</TABLE>
Shown below is information relating to the exercise of options by the
Chief Executive Officer and the other named executive officers during 1994
and the value of unexercised options held by such persons as of
December 31, 1994.
<TABLE>
AGGREGATED OPTION EXERCISES IN 1994
AND OPTION VALUES AT DECEMBER 31, 1994
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired On Value Underlying Unexercised Options In-the-Money Options
Exercise Realized At December 31, 1994 At December 31, 1994
Name (#) ($)<F1> (#) ($)<F2>
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Richard F. Teerlink 0 0 527,600 175,000 $11,573,208 $1,281,750
Jeffrey L. Bleustein 0 0 104,768 77,256 2,078,871 496,904
Thomas A. Gelb 0 0 32,274 53,406 556,244 301,257
C. William Gray 12,000 227,220 35,544 32,200 627,028 236,884
Martin R. Snoey 0 0 1,500 24,628 16,170 122,178
____________________
<FN>
<F1> Value based on the fair market value of Common Stock on the date of
exercise less the option exercise price.
<F2> Value based on a fair market value of Common Stock of $28.00 as of
December 31, 1994 less the option exercise price.
</TABLE>
Retirement Benefits
The following table shows at different levels of remuneration and
years of credited service the estimated net annual benefits payable as a
straight life annuity to each of the named executive officers (other than
Mr. Snoey, who does not participate in any Company defined benefit
retirement plans) under the Salaried Pension Plan, the Restoration Plan
and the Supplemental Benefits (all as defined below), assuming retirement
at age 62:
PENSION PLAN TABLE
Years of Service
Remuneration 5 10 15(1) 15-30(2)
$ 200,000 . . $15,417 $30,834 $46,251 $100,000
300,000 . . 23,417 46,834 70,251 150,000
400,000 . . 31,417 62,834 94,251 200,000
500,000 . . 39,417 78,834 118,251 250,000
600,000 . . 47,417 94,834 142,251 300,000
800,000 . . 63,417 126,834 190,251 400,000
1,000,000 . . 79,417 158,834 238,251 500,000
1,250,000 . . 99,417 198,834 298,251 625,000
(1) This column applies only to Mr. Gray, since he would not have 15
years of service upon retirement at age 62 and therefore would not be
entitled to the Supplemental Benefits.
(2) This column applies only to Messrs. Teerlink, Bleustein and Gelb.
The Company maintains the Retirement Annuity Plan for Salaried
Employees of Harley-Davidson, a noncontributory defined benefit pension
plan ("Salaried Pension Plan"). Under the Salaried Pension Plan, salaried
employees of the Company (excluding Holiday Rambler and certain other
subsidiaries), including the Chief Executive Officer and the other named
executive officers (other than Mr. Snoey), are generally eligible to
retire with unreduced benefits at age 62 or later. Benefits are based
upon monthly "final average earnings" as defined in the Salaried Pension
Plan. Prior to December 31, 1994, the monthly benefit is .016 times final
average earnings less .009 times primary monthly social security benefit,
multiplied by years of service. On and after December 31, 1994, the
revised benefit is .012 times final average earnings times years of
service plus .004 times final average earnings in excess of Social
Security covered compensation for the year multiplied by years of service.
The benefit of a person with service on or after December 31, 1994, is the
greater of his or her benefit determined using the revised formula for all
service or the sum of his or her benefit under the former formula for
service through December 31, 1993, and his or her benefit under the
revised formula for service after that date. For the named executive
officers (other than Mr. Snoey), final average earnings equal one-twelfth
of the highest average annual total compensation (consisting of base
salary and bonus as shown in the Summary Compensation Table) paid over
five consecutive calendar years within the last ten years of service prior
to the participant's retirement or other date of termination. Vesting
under the Salaried Pension Plan occurs upon the earlier of five years of
service or age 65. An employee who retires after age 55 and before age 62
with a minimum of 5 years of service will receive an actuarially reduced
benefit under the Salaried Pension Plan. The surviving spouse of an
employee who is eligible for early retirement or who is vested at death is
also entitled to certain benefits under the Salaried Pension Plan.
The Company has adopted a pension benefit restoration plan (the
"Restoration Plan") pursuant to which the Company will pay participants
amounts that exceed certain limitations the Internal Revenue Code imposes
on benefits payable under the Salaried Pension Plan. Calculated as of
December 31, 1994, annualized final average earnings and years of credited
service under the Salaried Pension Plan and the Restoration Plan were as
follows: $709,819 and 18.4 years (including a grant of 5 additional years
of service under the Restoration Plan), respectively, for Mr. Teerlink;
$384,195 and 23.9 years, respectively, for Mr. Bleustein; $337,277 and
25.2 years (including a grant of 6 additional years of service under the
Restoration Plan), respectively, for Mr. Gelb; and $204,782 and 4.3 years,
respectively, for Mr. Gray.
The Board has approved supplemental executive retirement benefits
(the "Supplemental Benefits") for the Chief Executive Officer and the
other named executive officers (other than Mr. Snoey). Under such
benefits, a participant who retires at or after age 55 with 15 years of
service (including the grant of 5 additional years of service for Mr.
Teerlink and 6 additional years for Mr. Gelb) is entitled to a yearly
retirement benefit payment equal to 35% of the executive's annualized
final average earnings at age 55 increasing in equal increments to 50% of
annualized final average earnings at age 62, reduced by the amount of any
pension payable by the Company under the Salaried Pension Plan, by any
other defined benefit retirement programs of the Company and by the amount
of benefits under the Restoration Plan. Amounts payable under the
Restoration Plan and the Supplemental Benefits may be partially or fully
funded at retirement through the use of split-dollar life insurance, lump
sum cash payments and/or other means.
Agreements
The Company has entered into employment agreements with Messrs.
Teerlink, Bleustein and Gelb, which provide that, upon termination of
employment for reasons other than cause, the Company will pay each such
employee certain amounts, including such employee's base compensation in
effect on the date of such termination (which currently would approximate
the amount of cash compensation set forth in the Summary Compensation
Table) for a period not exceeding one year (three years in the case of
Mr. Teerlink), together with other benefits to which such employee was
entitled prior to termination. Such employment agreements do not
establish minimum base salary levels for such employees.
The Company has entered into transition agreements with Messrs.
Teerlink, Bleustein, Gelb and Snoey which become effective upon a change
of control of the Company as defined therein. The transition agreements
provide that in the event of termination of such individual's employment
with the Company for any reason (other than death or disability) within
one year (three years in the case of Mr. Teerlink) after a change of
control of the Company, such individual will receive a cash payment in an
amount equal to the product of three multiplied by the sum of (1) the
individual's highest annual base salary during the five-year period
preceding termination and (2) the highest annual bonus paid during the
five-year period preceding termination. Such individual will also receive
immediate vesting in any retirement, incentive, stock option and other
deferred compensation plans. The contracts state that if any of the
payments to the employees are considered "excess parachute payments" as
defined in Section 280G of the Internal Revenue Code the Company will pay
the penalty imposed upon the employee plus a tax gross-up.
A "change of control" for purposes of the transition agreements
includes the following events: (i) continuing directors no longer
constitute at least two-thirds of the directors serving on the Board, (ii)
any person or group becomes a beneficial owner of 20% or more of the
Common Stock, (iii) the Company's shareholders approve a merger involving
the Company, the sale of substantially all of the Company's assets or the
liquidation or dissolution of the Company, unless in the case of a merger
continuing directors constitute at least two-thirds of the directors
serving on the board of directors of the survivor of such merger, or (iv)
at least two-thirds of the continuing directors determine that a proposed
action, if taken, would constitute a change of control of the Company and
such action is taken. A continuing director is a director of the Company
who was a director on a specified date (generally on or shortly prior to
the date of the applicable transition agreement) or who was designated by
a majority of the continuing directors as a continuing director at the
time of his or her initial election to the Board.
Board of Directors Human Resources Committee Report on Executive
Compensation
The Human Resources Committee is responsible for establishing,
reviewing and revising the compensation policies for the Company's
executive officers. The Human Resources Committee is composed entirely of
directors who are not employees or former employees of the Company and who
do not have a business relationship with the Company other than in their
capacity as directors.
This report is being included pursuant to Securities and Exchange
Commission ("SEC") rules designed to enhance disclosure of public
companies' executive compensation policies. This report addresses the
Company's compensation policies for 1994 as they affected the Chief
Executive Officer and the Company's other executive officers, including
the other named executive officers.
General
Under the supervision of the Human Resources Committee, the Company
has developed and implemented compensation policies, plans and programs
that seek to attract and retain qualified and talented employees and
enhance the profitability of the Company. In furtherance of these goals,
the Company's executive compensation policies, plans and programs, in
addition to benefit plans available to salaried employees generally,
consisted of base salary, annual incentive compensation, annual stock
option grants, annual perquisite payments, a non-qualified pension plan, a
non-qualified pension benefit restoration plan, a 401(k) plan (with a
Company matching feature), a non-qualified deferred compensation plan and
life insurance benefits.
In addition to the experience and knowledge of the Human Resources
Committee and the Company's Human Resources staff, the Human Resources
Committee utilizes the services of an independent human resources
consultant in making its executive compensation decisions. Each year the
Company's Human Resources staff selects several executive or other senior
officer positions for benchmarking against comparable companies. The
comparable companies are Fortune 500 "make and sell" companies with annual
sales of $1 billion to $1.5 billion having comparable performance. The
independent human resources consultant retained by the Company conducts a
survey of compensation packages for the specified types of executive or
senior officer positions at the comparable companies and prepares a
written analysis (the "Independent Compensation Analysis"). The
Independent Compensation Analysis includes median base salary (including
the percentage increase over the prior year), median annual bonus
percentage and median stock option information for the comparable
companies by position. The Independent Compensation Analysis also
recommends ranges for base salary, annual bonus and stock option
compensation for the selected Company executive or senior officer
positions.
The comparable companies used to benchmark executive compensation are
not included on the Performance Graph included below because they change
from year to year depending on both the Company's and other companies'
performance. The purpose of the Performance Graph is to compare the
performance of the Company's Common Stock over a five-year period against
a stock index or a fixed group of companies. In contrast, the Company
generally utilizes compensation surveys to compare its executive
compensation policies against companies that have specified performance
and other characteristics similar to those of the Company during a limited
period of time. The Company believes that including such companies as a
separate group on the Performance Graph would be confusing and potentially
misleading.
In general, it is the policy of the Human Resources Committee to fix
executive base salary range midpoints at levels below the median amounts
paid to executives with similar qualifications, experience and
responsibilities at other comparable businesses. Executives' actual
salaries are determined by individual performance evaluations and
potential future contributions to the Company. It is also the policy of
the Human Resources Committee generally to establish maximum incentive
cash compensation and stock option grants at levels above the median
amounts paid or granted to executives with similar qualifications,
experience and responsibilities at other comparable businesses. The
Company intends to provide a total compensation opportunity for Company
executives that is above average, but with an above average amount of the
total compensation opportunity at risk and dependent upon continuously
improving Company performance. In all cases, the Human Resources
Committee considers the total potential compensation payable to each of
the named executive officers and other executives when establishing or
adjusting any element of their compensation package.
1994 Base Salary
Executive base salaries are reviewed annually. In February 1994, the
Human Resources Committee, in consultation with the Vice President, Human
Resources for the Motor Company, increased Mr. Teerlink's base salary by
4%. This increase was within the range recommend by the Independent
Compensation Analysis and was based upon the Human Resources Committee's
subjective assessment of Mr. Teerlink's past performance (including his
leadership, his role in the financial performance of the Company and his
role in implementing new educational programs at all levels of the
Company) and its expectations for his future contributions in leading the
Company. Also in February 1994, the Human Resources Committee reviewed,
with the Chief Executive Officer and Vice President, Human Resources for
the Motor Company, and approved, with modifications it deemed appropriate,
the annual salary plan for the Company's other executive officers. The
annual salary plan was developed by the Motor Company's Human Resources
staff under the direction of the President of the Motor Company based
primarily upon each executive's individual performance evaluation for the
prior year, the anticipated future contribution of each executive and the
Independent Compensation Survey. 1994 base salaries for the named
executive officers are set forth in the Summary Compensation Table. Based
on the annual Independent Compensation Analysis, the Human Resources
Committee believes that the base salaries paid to its executive officers
are generally below the median of base salaries paid to comparable
executive officers of comparable companies.
1994 Incentive Cash Compensation
The Company had three separate short term incentive plans in which
executive officers participated for 1994: Messrs. Teerlink, Gelb and one
other executive officer participated in the Company's 1994 Corporate Short
Term Incentive Plan (the "Corporate STIP"); the other named executive
officers (other than Mr. Snoey) and certain other executive officers
participated in the Motor Company 1994 Short Term Incentive Plan (the
"Motor Company STIP"); and Mr. Snoey participated in the Holiday Rambler
Corporate 1994 Short Term Incentive Plan (the "Holiday Rambler STIP"). In
December 1993, the Human Resources Committee reviewed and approved the
Motor Company STIP, the Holiday Rambler STIP and target awards for
participants in such plans. In February 1994, the Board adopted the
Corporate STIP and the Human Resources Committee established the
performance targets (consolidated net income) and target awards under the
Corporate STIP for 1994 for participating executives. Award payouts under
the Motor Company STIP and the Holiday Rambler STIP were based upon
performance targets included in the plans approved by the Human Resources
Committee in December 1993. The Motor Company STIP included both Motor
Company financial targets related to earnings and working capital
(weighted 55%) and Motor Company strategic targets related to product
quality, schedule attainment and the Motor Company's manufacturing
strategy (weighted 45%). The Holiday Rambler STIP included both Holiday
Rambler financial targets related to earnings (weighted 50%) and Holiday
Rambler strategic targets related to quality, variance to plan, unit
volume and production times. The target awards for the five named
executive officers ranged from 50% to 100% of their respective 1994 base
salaries. The amount of each executive's target award is reviewed
annually based upon the Independent Compensation Analysis, the executive's
individual performance evaluation for the prior year and the Human
Resources Committee's appraisal of the executive's anticipated future
contribution to the Company. Depending on Company performance and, in the
case of the Corporate STIP, the subjective determination of the Human
Resources Committee with respect to downward adjustments, actual short
term incentive plan awards can range from 0% to 200% of the target award.
Under the Corporate STIP formula based on the consolidated net income
performance criteria selected by the Human Resources Committee and actual
Company performance, Mr. Teerlink was eligible to receive a maximum award
of $788,463 for 1994, or 178.83% of the target award. Under the terms of
the Corporate STIP, the Human Resources Committee has the discretion to
reduce awards determined by the formula by up to 50%. The Human Resources
Committee exercised its discretion and determined that Mr. Teerlink's
actual 1994 STIP award would be $700,000. The Human Resources Committee
based its determination in part on the percentage payout for 1994 under
the Motor Company STIP (154.6%) and the Holiday Rambler STIP (116.64%) and
the financial and strategic performance of the Company as a whole. The
Human Resources Committee considered in particular that the financial and
strategic results at the Motor Company were significantly above target,
while the financial and strategic results at Holiday Rambler were
generally at expected levels. An evaluation of the financial and
strategic performance of the Company as a whole indicated significant
accomplishment in both categories. Mr. Gelb's actual 1994 Corporate STIP
award was determined by the Committee in a similar manner. The awards for
the other executive officers were determined mathematically under the
Motor Company STIP or the Holiday Rambler STIP. All short term incentive
plan awards paid or payable for 1994 by the Company with respect to the
named executive officers are set forth in the Summary Compensation Table.
1994 Stock Option Grants
While the short term incentive plans provide Company executives with
short term incentives to maximize Company performance, the Human Resources
Committee believes that it is also important to provide incentives that
more directly tie executives' long term compensation to long term returns
to the Company's shareholders. This long term incentive compensation
opportunity is provided through the Company's stock option plans (the
"Option Plans"). Annually, the Human Resources Committee reviews, with
the Vice President, Human Resources and, except in the case of his own
stock option grant, the Chief Executive Officer, and approves individual
stock option grants for each of the Company's executive officers,
including the named executive officers. The amount of each executive's
stock option grant is subjectively determined by the Human Resources
Committee based upon the annual Independent Compensation Analysis, the
executive's individual performance evaluation for the prior year, the
executive's base salary and the Human Resources Committee's appraisal of
the executive's anticipated long term future contribution to the Company.
The stock options granted to the named executive officers in 1994 are set
forth in the Summary Compensation and Option Grants Tables.
Other Compensation
The Human Resources Committee believes that the compensation paid or
payable pursuant to the Company's annual perquisite payments, pension
plan, pension benefit restoration plan, 401(k) plan, deferred compensation
plan and life insurance benefits are competitive with the benefit packages
offered by comparable employers. From time to time the Human Resources
Departments of the Motorcycle Division and Holiday Rambler obtain data to
ensure that such benefit plans and programs remain competitive. The Human
Resources Committee reviewed such data in February 1994.
Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code provides that a publicly
held corporation will not be entitled to deduct for federal income tax
purposes compensation paid to a named executive officer in excess of $1
million in any year. Incentive compensation based on company performance,
provided it is paid pursuant to a plan which has been approved by
shareholders and meets certain other criteria, is not subject to Section
162(m). It is the Human Resources Committee's intention to continue to
utilize incentive compensation as a substantial component of the Company's
executive compensation program and to structure the payment of incentive
compensation so that the Company will not lose any deductions under
Section 162(m).
Conclusion
Over the last three calendar years, shareholders of the Company have
enjoyed a total return of 152%. During that same period of time the
Standard & Poor's 500 and MidCap 400 Indexes had total returns of 20% and
23%, respectively. The Human Resources Committee believes that the
compensation policies and practices of the Company described in this
report have supported this performance. In addition, the Human Resources
Committee believes that these compensation policies and practices are in
the best interests of the Company and consistent with the Company's
commitment to balance the interests of all of the Company's Stakeholders
(customers, dealers, suppliers, employees, investors, government and
society).
Barry K. Allen, Chairman
William F. Andrews
Richard G. LeFauve
James A. Norling
Performance Graph
The SEC requires the Company to include in this Proxy Statement a
line graph presentation comparing cumulative five year Common Stock
returns with a broad-based stock index and either a nationally recognized
industry index or an index of peer companies selected by the Company. The
Company has chosen to use the Standard & Poor's 500 Index as the broad-
based index and Standard & Poor's MidCap 400 Index as a more specific
comparison. The Standard & Poor's MidCap 400 Index was chosen because the
Company does not believe that any other published industry or line-of-
business index adequately represents the current operations of the Company
or that it can identify a peer group that provides a useful comparison.
PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return*
1989 1990 1991 1992 1993 1994
Harley-
Davidson, Inc. $100.00 $98.09 $228.03 $383.44 $450.90 $575.45
S&P MidCap 400 100.00 94.88 142.42 159.38 181.62 175.11
S&P 500 100.00 96.89 126.41 136.05 149.76 151.74
____________________
* Assumes $100 invested on December 31, 1989.
CERTAIN TRANSACTIONS
Mr. James, a director of the Company, is Vice Chairman, Chief
Executive Officer and an equity owner of Fred Deeley Imports Ltd. ("Deeley
Imports"), the exclusive distributer of the Company's motorcycles in
Canada. In 1994, Deeley Imports paid the Company approximately $42
million for motorcycles, parts and accessories and related products and
services. All such products and services were provided in the ordinary
course of business at prices and on terms and conditions determined
through arms-length negotiation. The Company anticipates that it will do
a similar amount of business with Deeley Imports in 1995.
Mr. Gray, Vice President, Human Resources, received an interest-free
relocation loan from the Company in connection with his joining the
Company in 1990. The largest amount outstanding under the relocation loan
in 1994 was $70,000. As of March 31, 1995, $50,000 was outstanding under
the relocation loan.
2 - APPROVAL OF HARLEY-DAVIDSON, INC.
1995 STOCK OPTION PLAN
The Company is seeking shareholder approval of the Harley-Davidson,
Inc. 1995 Stock Option Plan (the "1995 Plan"). The Board adopted the 1995
Plan on February 3, 1995, subject to shareholder approval. The following
summary description of the 1995 Plan is qualified in its entirety by
reference to the full text of the 1995 Plan which is attached to this
Proxy Statement as Exhibit A.
Summary of Proposal
The purpose of the 1995 Plan is to provide favorable opportunities
for certain selected employees of the Company and its subsidiaries to
purchase shares of Common Stock or to benefit from the appreciation
thereof. Such opportunities are expected to provide an increased
incentive for these employees to contribute to the future success and
prosperity of the Company, thus enhancing the value of the stock for the
benefit of the shareholders and increasing the ability of the Company to
attract and retain individuals of exceptional skill upon whom, in large
measure, its sustained progress, growth and profitability depend.
The Company currently has in effect the Company's 1986 Stock Option
Plan (the "1986 Plan"), the 1988 Stock Option Plan (the "1988 Plan") and
the 1990 Stock Option Plan (the "1990 Plan" and, with the 1986 Plan and
the 1988 Plan, the "Existing Plans"). As of March 16, 1995, a total of
_____________ shares of Common Stock remained available for the granting
of additional awards under the Existing Plans. Upon adoption of the 1995
Plan, the Existing Plans will be terminated (except with respect to
outstanding options) and no additional options will be granted under the
Existing Plans.
The 1995 Plan will be administered by the Human Resources Committee
of the Board. Key employees of the Company or any of its subsidiaries, as
well as persons who have been engaged to become key employees, are
eligible to participate in the 1995 Plan. 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 are not eligible
to participate in the 1995 Plan. As of March 31, 1995, there were
approximately 300 employees of the Company and its subsidiaries
participating in the Existing Plans and eligible to participate in the
1995 Plan. The number of eligible employees is expected to increase over
time based upon future growth of the Company.
The 1995 Plan authorizes the granting to key employees of options to
purchase Common Stock ("Options"), which may be either "incentive stock
options" meeting the requirements of Section 422 of the Internal Revenue
Code ("ISOs") or non-qualified Options. The total number of shares of
Common Stock available for grants of Options is 3,800,000, provided that
Options for not more than 200,000 shares of Common Stock may be granted to
any participant in any calendar year under the 1995 Plan, which amount
will be reduced by the amount of Common Stock subject to Options granted
to the participant in such calendar year under any other stock option plan
of the Company. Options may not be granted under the 1995 Plan after
April 26, 2005.
The exercise price per share of Common Stock subject to an Option
will be determined by the Committee, provided that the exercise price may
not be less than the fair market value of the underlying Common Stock on
the date of grant. The Committee determines the date after which Options
may be exercised in whole or in part and the date on which each Option
expires, which date cannot be more than ten years from the date of grant.
The exercise price of an Option may be paid in cash or, subject to such
conditions or prohibitions as may be set by the Committee, by delivering
shares of Common Stock or a combination of cash and stock. Subject to the
discretion of the Committee, a participant may elect to have the Company
withhold shares of Common Stock otherwise issuable to the participant upon
the exercise of an Option for purposes of paying withholding amounts
relating to income or other taxes incurred by reason of the exercise.
Options may not be transferred except by reason of the death of the
participant.
Under the 1995 Plan, the Committee may grant a participant, at or
after the time of the Option grant, a stock appreciation right for all or
any portion of the Option. A stock appreciation right entitles the
participant upon the exercise of the stock appreciation right, in lieu of
exercising the Option, paying the exercise price and receiving Common
Stock, to receive in cash the difference between the exercise price of the
Option and the fair market value of the underlying Common Stock on the
date of exercise. The Existing Plans also allow the Committee to grant
stock appreciation rights, but no stock appreciation rights have been
granted as of March 31, 1995.
In the event of a participant's retirement at age 62 (or earlier with
the consent of the Committee), any outstanding Option will, in general, be
exercisable by the participant or his or her beneficiary within three
years after such event (but not subsequent to the expiration of the
Option). In the event of a participant's death or disability, any
outstanding Option may be exercisable by the participant or his or her
beneficiary for a period of up to one year after such event (but not
subsequent to the expiration of the Option). In the event of a
participant's voluntary or involuntary termination of employment with the
Company or its subsidiaries for any reason other than retirement, death or
disability, any outstanding Options will expire on the date of termination
of employment.
Each Option granted under the 1995 Plan will have a limited right
that will permit the holder to surrender the Option within 30 days after a
change of control of the Company and receive the difference between the
exercise price of the Option and the highest closing price of the Common
Stock in the 60-day period preceding the change of control of the Company.
For this purpose, "change of control" includes any of the following
events: (i) continuing directors (any person who was either a director on
February 2, 1995 or was designated before such person's initial election
to the Board of Directors as a continuing director by a majority of the
continuing directors) no longer constitute at least two-thirds of the
directors serving on the Board; (ii) any person or group becomes a
beneficial owner of 20% or more of the Common Stock; (iii) the Company's
shareholders approve a merger involving the Company, the sale of
substantially all of the Company's assets or the liquidation or
dissolution of the Company, unless in the case of a merger the continuing
directors constitute at least two-thirds of the directors serving on the
board of directors of the survivor of such merger; or (iv) at least two-
thirds of the outside, continuing directors determine that a proposed
action, if taken, would constitute a change of control of the Company and
such action is taken.
The Board of Directors may suspend or terminate the 1995 Plan in
whole or in part or amend it as the Board deems appropriate. However, no
amendment may be made without approval of the shareholders if such
amendment would (a) materially modify the eligibility requirements for
receiving Options; (b) increase the aggregate number of shares of Common
Stock that may be issued pursuant to Options granted under the 1995 Plan,
except under an adjustment of the type described below; (c) increase the
number of shares of Common Stock that may be issued pursuant to Options
granted to a participant in any calendar year, except under an adjustment
of the type described below; (d) reduce the minimum option price, except
under an adjustment of the type described below; (e) extend the period of
granting Options under the 1995 Plan; or (f) materially increase in any
other way the benefits accruing to participants.
If the Company declares a dividend payable in, or subdivides or
combines, its Common Stock or any other event occurs which, in the
judgment of the Committee, necessitates an equitable adjustment of amounts
under the 1995 Plan to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the 1995 Plan, then
the Committee will generally have the authority to make appropriate
adjustment to (i) the number and type of shares of Common Stock subject to
the 1995 Plan; (ii) the number of shares of Common Stock that may be
issued pursuant to Options granted to any participant in any calendar
year; (iii) the number and type of shares of Common Stock subject to
outstanding Options; and (iv) the grant, purchase or exercise price with
respect to any Option.
The number of Options that will be granted under the 1995 Plan in the
future to any single key employee or group of key employees is not
determinable. The following table shows the number of shares of Common
Stock underlying Options granted in February 1995 under the Existing Plans
to the named executive officers, all executive officers as a group, and
all employees as a group. The Options were granted at an exercise price
of $26.94 per share. The closing price of the Common Stock on the New
York Stock Exchange was $_____ per share on March 16, 1995. Options
granted under the Existing Plans to the named executive officers during
1994 are disclosed above under the caption "Executive Compensation."
1995 OPTION GRANTS
Number of Shares
Underlying
Options Granted
on
Name February 2, 1995
Richard F. Teerlink . . . . . . . . 90,000
Jeffrey L. Bleustein . . . . . . . 48,000
Thomas A. Gelb . . . . . . . . . . 36,211
C. William Gray . . . . . . . . . . 28,124
Martin R. Snoey . . . . . . . . . . 20,337
All Executive Officers as a Group
(8 Persons) . . . . . . . . . . . . 255,058
All Employees as a Group . . . . . 805,360
Directors and other persons who are not employees of the Company are not
eligible to receive Options under the 1995 Plan or the Existing Plans.
The grant of an Option under the 1995 Plan will create no income tax
consequences to the participant or to the Company. A participant who is
granted a nonqualified Option will generally recognize ordinary income at
the time of exercise in an amount equal to the excess of the fair market
value of the Common Stock at such time over the exercise price. The
Company will be entitled to a deduction in the same amount and at the same
time as ordinary income is recognized by the participant. Amounts payable
in connection with the settlement of stock appreciation rights receive
similar treatment. A subsequent disposition of Common Stock acquired on
exercise of an Option will give rise to capital gain or loss to the extent
the amount realized from the sale differs from the tax basis, i.e., the
fair market value of the Common Stock on the date of exercise. This
capital gain or loss will be a long-term capital gain or loss if the
Common Stock had been held for more than one year from the date of
exercise. Generally, for ISOs, the appreciated value of the underlying
stock received upon exercise will be taxable to the participant as a
capital gain upon sale of the stock, and the Company will not receive any
tax deduction.
The affirmative vote of a majority of the shares of Common Stock
present or represented at the Annual Meeting is required for approval of
the 1995 Plan, provided that shareholders holding a majority of the
outstanding shares of Common Stock cast votes on the proposal. For
purposes of determining the vote regarding this proposal, abstentions will
have the effect of a vote against the proposal (but will not be counted as
votes cast with respect to the proposal for purposes of determining
whether a majority of the outstanding shares were voted), and broker
nonvotes will have no impact on the vote. Proxies solicited by the Board
will be voted "FOR" approval of the 1995 Plan unless a shareholder
specifies otherwise.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE 1995 PLAN.
3 -- AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
INCREASING AUTHORIZED COMMON STOCK
The Company currently has 102,000,000 shares of capital stock
authorized consisting of 100,000,000 shares of Common Stock and 2,000,000
shares of Preferred Stock (the "Preferred Stock"). The Board has approved
for submission to shareholders and recommends an amendment to the
Company's Restated Articles of Incorporation to (i) increase the total
number of authorized shares of capital stock to 202,000,000 and (ii)
increase the total number of authorized shares of Common Stock to
200,000,000.
The purpose of increasing the number of shares of Common Stock is to
have additional shares available for general corporate purposes, including
stock dividends, stock splits, issuing stock in connection with various
employee incentive and retirement plans, raising additional capital and
other similar uses. By approving an increase in authorized Common Stock
in advance of any specific need, the Company may avoid the delay and
expense of obtaining shareholder approval at a later special meeting. As
of March 16, 1995, ___________ shares of Common Stock were outstanding and
there were ____________________ shares reserved for issuance upon the
exercise of outstanding options under the Existing Plans. Assuming the
1995 Plan is approved by the shareholders at the Annual Meeting, there
will be an additional 3,800,000 shares reserved for issuance under the
1995 Plan. Holders of outstanding Common Stock are not entitled to
preemptive rights.
Article IV (a) of the Company's Restated Articles of Incorporation
currently provides that the total number of shares of all classes of stock
that the Company is authorized to issue is 102,000,000 consisting of
100,000,000 shares of Common Stock and 2,000,000 shares of Preferred
Stock. The proposed amendment to the first sentence of the first
paragraph of Article IV (a) of the Company's Restated Articles of
Incorporation would delete the existing provision and in its place insert
the following:
"(a) Authorized Shares. The total number of shares of all classes
of stock that the Corporation is authorized to issue is two hundred two
million (202,000,000), consisting of (i) two hundred million
(200,000,000) shares of Common Stock of $.01 par value, and (ii) two
million (2,000,000) shares of Preferred Stock of $1.00 par value."
The proposed amendment to the Restated Articles of Incorporation will
be approved if a majority of the outstanding shares of Common Stock are
voted "FOR" the proposed amendment. For purposes of determining the vote,
abstentions and broker nonvotes will not be counted and will have the same
effect as a vote against the proposal. Proxies solicited by the Board
will be voted "FOR" approval of the proposed amendment unless a
shareholder specifies otherwise.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF THE
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION.
4--RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP, independent public accountants, audited the
Company's consolidated financial statements for the fiscal year ended
December 31, 1994. Representatives of Ernst & Young LLP will be present
at the Annual Meeting to respond to appropriate questions and to make a
statement, if they so desire. Ernst & Young LLP has been recommended by
the Audit Committee and selected by the Board to serve as independent
auditors for the current fiscal year, and in accordance with a resolution
of the Board, this selection is being presented to shareholders for
ratification.
If prior to the Annual Meeting Ernst & Young LLP shall decline to act
or otherwise become incapable of acting, or if its engagement shall be
otherwise discontinued by the Board, then the Board will appoint other
independent auditors whose engagement for any period subsequent to the
Annual Meeting will be subject to ratification by the shareholders at the
Annual Meeting. If the shareholders fail to ratify the engagement of
Ernst & Young LLP at the Annual Meeting, the Board will reconsider its
selection of independent auditors. Proxies solicited by the Board will be
voted "FOR" ratification of the selection of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1995, unless the shareholder specifies otherwise.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
5--OTHER MATTERS
The matters referred to herein are, as far as management now knows,
the only matters which will be presented for consideration at the Annual
Meeting. Among other things, to bring business before an annual meeting,
a shareholder must give written notice thereof to the Secretary of the
Company in advance of the meeting in compliance with the terms and within
the time periods specified in the Company's Restated Articles of
Incorporation. If any other matter should properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying form
of proxy to vote the shares represented by them in accordance with their
judgment.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers to file reports of ownership
and changes in ownership of Common Stock with the Securities and Exchange
Commission. Mr. Allen, a director of the Company, failed to report on a
timely basis the sale during 1994 of 1.35 shares held by him in the
Company's Dividend Reinvestment Plan. Such sale was reported on a Form 5
which Mr. Allen filed on a timely basis.
The cost of soliciting proxies will be borne by the Company. Proxies
may be solicited by personal interview, telephone, telegraph and facsimile
machine, as well as by use of the mails. It is anticipated that banks,
brokerage houses and other custodians, nominees or fiduciaries will be
requested to forward soliciting materials to their principals and to
obtain authorization for the execution of proxies and that they will be
reimbursed for their out-of-pocket expenses incurred in that connection.
Employees of the Company participating in the solicitation of proxies will
not receive any additional remuneration. The Company has retained D. F.
King & Co., Inc. to aid in the solicitation at an estimated cost of
approximately $6,000 plus out-of-pocket expenses.
SHAREHOLDER PROPOSALS
Proposals by shareholders which are intended to be presented at the
1996 annual meeting of shareholders must be received by the Company no
later than December 4, 1995, to be eligible for inclusion in the Company's
proxy materials for that meeting.
By Order of the Board of Directors,
TIMOTHY K. HOELTER
Secretary
Milwaukee, Wisconsin
March 31, 1995
<PAGE>
Exhibit A
HARLEY-DAVIDSON, INC.
1995 STOCK OPTION PLAN
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. 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: Disinterested persons 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. 1995 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 3,800,000 provided that Options for not
more than 200,000 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.
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 anniver-
sary 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.
The Committee shall determine acceptable methods for tendering Common
Stock as payment upon exercise of an Option and may impose such limita-
tions 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 withhold-
ing 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 arrange-
ment. 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 alter-
nate 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: 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, execu-
tion 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.
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 Option-
ee 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 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 immedi-
ately 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 February 2, 1995, 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 transac-
tion 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 enlarge-
ment 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.
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 regula-
tions, 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 indemnifi-
cation 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 April 26, 2005.
<PAGE>
[PRELIMINARY COPY]
HARLEY-DAVIDSON, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR MAY 6, 1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned appoints each of Vaughn L. Beals, Jr., Richard F.
Teerlink and Timothy K. Hoelter, attorney and agent, with full power of
substitution and resubstitution, to vote as proxy in the name, place and
stead of the undersigned at the Annual Meeting of Shareholders of HARLEY-
DAVIDSON, INC. to be held on May 6, 1995 and at any adjournment thereof,
according to the number of votes that the undersigned would be entitled to
vote if personally present.
1. ELECTION OF DIRECTORS:
FOR the nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the to vote for both
contrary below) nominees listed below
Barry K. Allen, Richard G. LeFauve
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the following line:
_____________________________________________________________________
__________________________________________
2. APPROVAL OF THE HARLEY-DAVIDSON, INC. 1995 STOCK OPTION PLAN:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. APPROVAL OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION OF
HARLEY-DAVIDSON, INC. TO INCREASE THE TOTAL NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 100,000,000 TO 200,000,000:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK YOUR CHOICES ON BOTH SIDES AND SIGN
ON THE REVERSE SIDE AND RETURN PROMPTLY.
4. RATIFICATION OF AUDITORS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Without limiting the generality hereof, each of such persons is authorized
to vote:
1. as hereinafter specified upon the proposals listed hereon and
described in the Proxy Statement for the Meeting; and
2. in his discretion upon any other matter that may properly come before
the Meeting.
The Board of Directors recommend a vote FOR the nominees as directors and
FOR Items 2, 3 and 4.
The shares represented by this Proxy shall be voted as specified. If no
specification is made, the shares shall be voted as recommended by the
Board of Directors.
IMPORTANT: Please sign your name or names
exactly as they appear on this Proxy. Joint
owners should each sign personally. A
corporation should sign in full corporate name by
duly authorized officers. When signing as
attorney, executor or administrator, trustee or
guardian, please give your full title as such.
_________________________________________________
Signature
_________________________________________________
Signature
Dated: ,1995
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. A STAMPED AND
ADDRESSED ENVELOPE HAS BEEN PROVIDED FOR YOUR USE.
<PAGE>
[PRELIMINARY COPY]
HARLEY-DAVIDSON, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR MAY 6, 1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned appoints each of Vaughn L. Beals, Jr., Richard F.
Teerlink and Timothy K. Hoelter, attorney and agent, with full power of
substitution and resubstitution, to vote as proxy in the name, place and
stead of the undersigned at the Annual Meeting of Shareholders of HARLEY-
DAVIDSON, INC. to be held on May 6, 1995 and at any adjournment thereof,
according to the number of votes that the undersigned would be entitled to
vote if personally present.
1. ELECTION OF DIRECTORS:
FOR the nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to to vote for both
the contrary below) nominees listed below
Barry K. Allen, Richard G. LeFauve
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the following line:
_____________________________________________________________________
__________________________________________
2. APPROVAL OF THE HARLEY-DAVIDSON, INC. 1995 STOCK OPTION PLAN:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. APPROVAL OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION OF
HARLEY-DAVIDSON, INC. TO INCREASE THE TOTAL NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 100,000,000 TO 200,000,000:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK YOUR CHOICES ON BOTH SIDES AND SIGN
ON THE REVERSE SIDE AND RETURN PROMPTLY.
RETIREMENT SAVINGS PLAN
4. RATIFICATION OF AUDITORS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Without limiting the generality hereof, each of such persons is authorized
to vote:
1. as hereinafter specified upon the proposals listed hereon and
described in the Proxy Statement for the Meeting; and
2. in his discretion upon any other matter that may properly come before
the Meeting.
The Board of Directors recommend a vote FOR the nominees as directors and
FOR Items 2, 3 and 4.
The shares represented by this Proxy shall be voted as specified. If no
specification is made, the shares shall be voted as recommended by the
Board of Directors.
IMPORTANT: Please sign your name or
names exactly as they appear on this
Proxy. Joint owners should each sign
personally. A corporation should sign
in full corporate name by duly
authorized officers. When signing as
attorney, executor or administrator,
trustee or guardian, please give your
full title as such.
_____________________________________
Signature
_____________________________________
Signature
Dated: ,1995
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. A STAMPED AND
ADDRESSED ENVELOPE HAS BEEN PROVIDED FOR YOUR USE.
<PAGE>
[PRELIMINARY COPY]
HARLEY-DAVIDSON, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR MAY 6, 1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned appoints each of Vaughn L. Beals, Jr., Richard F.
Teerlink and Timothy K. Hoelter, attorney and agent, with full power of
substitution and resubstitution, to vote as proxy in the name, place and
stead of the undersigned at the Annual Meeting of Shareholders of HARLEY-
DAVIDSON, INC. to be held on May 6, 1995 and at any adjournment thereof,
according to the number of votes that the undersigned would be entitled to
vote if personally present.
1. ELECTION OF DIRECTORS:
FOR the nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the to vote for both
contrary below) nominees listed below
Barry K. Allen, Richard G. LeFauve
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the following line:
_____________________________________________________________________
__________________________________________
2. APPROVAL OF THE HARLEY-DAVIDSON, INC. 1995 STOCK OPTION PLAN:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. APPROVAL OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION OF
HARLEY-DAVIDSON, INC. TO INCREASE THE TOTAL NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 100,000,000 TO 200,000,000:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK YOUR CHOICES ON BOTH SIDES AND SIGN
ON THE REVERSE SIDE AND RETURN PROMPTLY.
EMPLOYEES' RETIREMENT PLAN
4. RATIFICATION OF AUDITORS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Without limiting the generality hereof, each of such persons is authorized
to vote:
1. as hereinafter specified upon the proposals listed hereon and
described in the Proxy Statement for the Meeting; and
2. in his discretion upon any other matter that may properly come before
the Meeting.
The Board of Directors recommend a vote FOR the nominees as directors and
FOR Items 2, 3 and 4.
The shares represented by this Proxy shall be voted as specified. If no
specification is made, the shares shall be voted as recommended by the
Board of Directors.
IMPORTANT: Please sign your name or
names exactly as they appear on this
Proxy. Joint owners should each sign
personally. A corporation should sign
in full corporate name by duly
authorized officers. When signing as
attorney, executor or administrator,
trustee or guardian, please give your
full title as such.
______________________________________
Signature
______________________________________
Signature
Dated: ,1995
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. A STAMPED AND
ADDRESSED ENVELOPE HAS BEEN PROVIDED FOR YOUR USE.
