<PAGE>
DRAFT 5
March 20, 2000
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] 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] No fee required.
[ ] 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>
[LOGO OF HARLEY-DAVIDSON, INC.]
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
Harley-Davidson, Inc.
3700 West Juneau Avenue
Milwaukee, Wisconsin 53208
(414) 343-4680
March 27, 2000
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of Harley-Davidson,
Inc., I cordially invite you to attend the 2000 Annual Meeting of the
Shareholders of Harley-Davidson, Inc. to be held at 10:30 a.m., Central Time,
on Saturday, April 29, 2000, at the Midwest Express Center, 400 West Wisconsin
Avenue, Milwaukee, Wisconsin.
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 2000 Annual Meeting.
However, whether or not you are personally present, it is important that your
shares be represented. YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN. PLEASE SUBMIT A PROXY AS SOON AS POSSIBLE SO THAT YOUR SHARES WILL BE
REPRESENTED AT THE ANNUAL MEETING. YOU MAY SUBMIT YOUR PROXY (1) OVER THE
INTERNET, (2) BY TELEPHONE, OR (3) BY MAIL. FOR SPECIFIC INSTRUCTIONS, PLEASE
REFER TO THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
Sincerely yours,
[SIGNATURE OF JEFFREY L. BLEUSTEIN]
Jeffrey L. Bleustein
Chairman of the Board and
Chief Executive Officer
<PAGE>
Notice of Annual Meeting of Shareholders
April 29, 2000
The 2000 Annual Meeting of the shareholders (the "Annual Meeting") of
Harley-Davidson, Inc. (the "Company") will be held at the Midwest Express
Center, 400 West Wisconsin Avenue, Milwaukee, Wisconsin, on Saturday April 29,
2000 at 10:30 a.m., Central Time, for the following purposes:
1. To elect three directors for a three-year term to expire at the
Company's 2003 annual meeting of shareholders;
2. To ratify the selection of Ernst & Young LLP, independent public
accountants, to be the auditors of the annual financial statements of the
Company for the year ending December 31, 2000; and
3. To take action upon any other business as may properly come before
the Annual Meeting and any adjournments or postponements thereof.
The Board of Directors of the Company has fixed the close of business on
March 15, 2000 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting and any adjournments
or postponements thereof.
By Order of the Board of Directors,
Gail A. Lione
Secretary
Milwaukee, Wisconsin
March 27, 2000
WE URGE YOU TO VOTE AS SOON AS POSSIBLE. YOU CAN VOTE YOUR SHARES BY
MARKING YOUR VOTES ON THE ENCLOSED PROXY CARD, SIGNING AND DATING IT AND
MAILING IT IN THE POSTAGE-PAID ENVELOPE. IF YOUR SHARES ARE REGISTERED
DIRECTLY WITH THE COMPANY'S TRANSFER AGENT, FIRSTAR BANK, N.A. ("FIRSTAR"),
THEN YOU CAN VOTE THOSE SHARES BY USING A TOLL FREE TELEPHONE NUMBER OR THE
INTERNET. INSTRUCTIONS FOR USING THESE CONVENIENT SERVICES ARE SET FORTH ON
THE ENCLOSED PROXY CARD. STREET NAME HOLDERS MAY ALSO VOTE BY TELEPHONE OR THE
INTERNET IF THEIR BANK OR BROKER MAKES THOSE METHODS AVAILABLE, IN WHICH CASE
THE BANK OR BROKER WILL ENCLOSE THE INSTRUCTIONS WITH THE PROXY STATEMENT.
<PAGE>
[LOGO FOR HARLEY-DAVIDSON, INC.]
3700 West Juneau Avenue
Milwaukee, Wisconsin 53208
March 27, 2000
----------------
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 2000 Annual Meeting of Shareholders of the Company to be held on April 29,
2000 and at any adjournment thereof (the "Annual Meeting"). This Proxy
Statement and the accompanying proxy were first sent to shareholders on or
about March 27, 2000.
The only outstanding class of voting securities of the Company is its
common stock (the "Common Stock"). At the close of business on March 15, 2000,
the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting, 151,799,036 shares of Common Stock were
outstanding. Holders of the Common Stock are entitled to one vote per share on
all matters.
On February 17, 2000, the Company's Board declared a two-for-one stock
split payable on April 7, 2000 to shareholders of record on March 22, 2000.
Data regarding shares of Common Stock and per share amounts in this Proxy
Statement reflect pre-split amounts. The stock split does not affect the
number of shares a shareholder is entitled to vote at the Annual Meeting.
Shareholders who own shares registered directly with Firstar on the close
of business on March 15, 2000 can appoint a proxy by telephone by calling toll
free (within the U.S. or Canada) (877) 482-6153, by using the Internet at
https://www.css2.sungard.com/Firstar/InterLink?pbProxyVoting=1 or by mailing
their signed proxy card in the enclosed envelope. Street name holders may vote
by telephone or the Internet if their bank or broker makes those methods
available, in which case the bank or broker will enclose the instructions with
the proxy statement. The telephone and Internet voting procedures are designed
to authenticate shareholders' identities, to allow shareholders to give their
voting instructions and to confirm that the shareholders' instructions have
been properly recorded. Shareholders voting via the Internet should understand
that there may be costs associated with electronic access, such as usage
charges from Internet access providers and telephone companies, that the
shareholders must bear.
Appointing a proxy in response to this solicitation will not affect a
shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has appointed a proxy does
not in itself revoke a proxy. Shareholders who appoint proxies may revoke them
at any time prior to the voting thereof by appointing a new proxy or by
providing written notice (1) to the Secretary of the Company at the Company's
address shown above on or before April 26, 2000 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.
As used in this Proxy Statement, "Motor Company" refers to the Company's
principal subsidiaries, Harley-Davidson Motor Company Operations, Inc.,
Harley-Davidson Motor Company Group, Inc. and Harley-Davidson Motor Company,
Inc., and "HDFS" refers to Harley-Davidson Financial Services, Inc.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 15, 2000
(except as noted) 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"), all directors and
executive officers as a group and each person or group of persons known by the
Company to own beneficially more than 5% of the Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)(2)
---------------------------------------
Shares Issuable
Number of Percent Upon Exercise of
Name of Beneficial Owner Shares of Class Stock Options (3)
- ------------------------ --------- -------- -----------------
<S> <C> <C> <C>
Barry K. Allen......................... 10,327 * 1,200
Richard I. Beattie..................... 4,627 * 1,200
Jeffrey L. Bleustein................... 1,005,817 * 464,194
Richard J. Hermon-Taylor............... 10,327 * 1,200
Donald A. James........................ 107,327(4) * 1,200
Gail A. Lione.......................... 30,035 * 24,518
Sara L. Levinson....................... 3,897 * 1,200
James A. McCaslin...................... 148,725 * 48,752
James A. Norling....................... 6,327(5) * 1,200
Richard F. Teerlink.................... 941,602(6) * 904,500
Donna F. Zarcone....................... 6,217 * 6,017
James L. Ziemer........................ 198,041 * 144,248
All Directors and Executive Officers as
a Group (20 Individuals).............. 3,889,336 2.6% 1,997,849
The Equitable Companies Incorporated
1290 Avenue of the Americas
New York, NY 10104.................... 9,528,377(7) 6.3% 0
Ruane, Cunniff & Co., Inc.
767 Fifth Avenue
New York, NY 10153-4798............... 8,257,796(8) 5.4% 0
</TABLE>
- --------
*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 15, 2000. Includes shares of
Common Stock held in the Company's 401(k) plan and the Company's Dividend
Reinvestment Plan, as of December 31, 1999.
(3) Only includes stock options exercisable within 60 days of March 15, 2000.
(4) 105,000 of such shares of Common Stock are held by Fred Deeley Imports
Ltd. Mr. James has sole voting power and shared investment power over such
shares.
(5) 4,000 of such shares of Common Stock are held by Heritage Ventures, LTD, a
limited partnership.
(6) 20,000 shares are held by the Teerlink Family Foundation Inc. and 1,600
shares are held by Victoria Teerlink.
(7) Information derived from the Schedule 13G filed by The Equitable Companies
Incorporated and its affiliates. As of December 31, 1999, The Equitable
Companies Incorporated and its affiliates had sole voting
2
<PAGE>
power over 5,870,778 shares, shared voting power over 1,291,176 shares,
sole dispositive power over 9,481,506 shares and shared dispositive power
over 38,771 shares.
(8) Information derived from the Schedule 13G filed by Ruane, Cunniff & Co.,
Inc. As of December 31, 1999, Ruane, Cunniff & Co., Inc. had sole voting
power over 6,493,489 shares, sole dispositive power over 3,480,296 shares
and shared dispositive power over 4,777,500 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 III Directors), three of whom have terms
that expire at the 2001 annual meeting of shareholders (Class I Directors) and
three of whom have terms that expire at the 2002 annual meeting of
shareholders (Class II Directors).
The three nominees for director set forth below, all of whom are currently
Class III Directors, are proposed to be elected at the Annual Meeting to serve
until the 2003 annual meeting of shareholders. The remaining six directors
will continue to serve as members of the Board for terms as set forth below.
The 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 and has no discretion to vote on such
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 15, 2000, 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 III Directors--Terms Expiring at 2003 Annual Meeting
Jeffrey L. Bleustein, 60, has been a director of the Company since 1996. In
December 1998, Mr. Bleustein was elected Chairman of the Board of the Company.
He has served as President and Chief Executive Officer of the Company and
Chief Executive Officer of the Motor Company since June 1997 and as President
and Chief Operating Officer of the Motor Company since 1993. He was Executive
Vice President of the Company from 1991 to June 1997. He is also a director of
Brunswick Corporation.
Donald A. James, 56, has been a director of the Company since 1991. Mr.
James is a co-founder and, since 1989, 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.
3
<PAGE>
James A. Norling, 58, has been a director of the Company since 1993. In
June 1999, Mr. Norling was appointed Executive Vice President of Motorola,
Inc. and President, Personal Communications Section. He served as Executive
Vice President, Deputy to Chief Executive Officer and President of EMEA for
Motorola, Inc., a manufacturer of electronics, since December 1998. Mr.
Norling has served as President and General Manager, Messaging, Information
and Media Sector, for Motorola since January 1997 and as an Executive Vice
President of Motorola since 1990. He was President, Europe, Middle East and
Africa, and Chairman, European Management Board, for Motorola from 1993 to
1996.
Class I Directors--Terms Expiring at 2001 Annual Meeting
Barry K. Allen, 51, has been a director of the Company since 1992. Mr.
Allen has been Executive Vice President of Ameritech/SBC Communications (f/k/a
Ameritech Corporation), a telecommunications company, since August 1995. From
September 1993 to August 1995, he was President and Chief Operating Officer
and a director of Marquette Electronics, Inc., a manufacturer of medical
equipment and systems.
Richard I. Beattie, 60, has been a director of the Company since 1996. He
has been a partner of Simpson Thacher & Bartlett, a law firm, since 1977 and
has served as Chairman of the Executive Committee of that firm since 1991.
Richard G. LeFauve, 65, has been a director of the Company since 1993. In
December 1998, Mr. LeFauve retired as President of GM University and a Senior
Vice President of General Motors Corporation, an automobile manufacturer, a
position which he held since April 1997. He was Group Executive, NAO Small Car
Group of General Motors Corporation from 1994 to April 1997, Chairman of
Saturn Corporation, an automobile manufacturer, from 1995 to April 1997, a
Vice President of General Motors Corporation from 1985 to April 1997, and
President of Saturn Corporation from 1986 to 1995.
Class II Directors--Terms Expiring at 2002 Annual Meeting
Richard J. Hermon-Taylor, 58, has been a director of the Company since
1986. He has served as a Group Vice President of Abt Associates, Inc., a
business consulting firm, since June 1997 and as President of BioScience
International, Inc., a technology transfer company, since 1987. He was a Vice
President of Symmetrix, Inc., a business consulting firm, from 1994 to 1997.
Sara L. Levinson, 49, has been a director of the Company since 1996. On
April 30, 2000, Ms. Levinson will resign her position as President of NFL
Properties, Inc., the trademark licensing company for the National Football
League. Ms Levinson served as President of NFL Properties, Inc. since
September 1994. From 1986 to September 1994, she held various executive
positions with Viacom, Inc., a media and entertainment company, including
President--Business Director of MTV from 1993 to September 1994. She is also a
director of Federated Department Stores Inc.
Richard F. Teerlink, 63, has been a director of the Company since 1982.
From May 1996 to December 1998, he served as Chairman of the Board of the
Company. He served as Chief Executive Officer of the Company from 1989 to June
1997 and President of the Company from 1988 to June 1997. He is also a
director of Johnson Controls, Inc. and Snap-on Incorporated.
Board of Directors--Committee and Other Information
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 Richard I. Beattie,
Donald A. James, Sara L. Levinson, James A. Norling (Chairman) and Richard F.
Teerlink, met twice during 1999. The Audit Committee selects, subject to
shareholder ratification, and engages independent public accountants to audit
the books,
4
<PAGE>
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, Richard J. Hermon-Taylor and Richard G. LeFauve (Chairman), met three
times during 1999. The Human Resources Committee approves certain compensation
and benefits actions, reviews performance of certain executives 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), Richard I. Beattie, Richard J. Hermon-Taylor,
Donald A. James, Richard G. LeFauve, Sara L. Levinson and James A. Norling,
met twice during 1999. The Nominating and Director Affairs Committee
identifies and recommends to the full Board candidates for service on the
Board and reviews Board performance and Board committee composition.
Shareholders may recommend candidates for consideration by the Nominating and
Director Affairs Committee by writing to the Nominating and Director Affairs
Committee in care of the Secretary of the Company. Such recommendations for
the 2001 annual meeting of shareholders must be received by the Company on or
before November 27, 2000. Any shareholder who desires to nominate 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 has four regular quarterly meetings per year and met five times
during 1999. All directors attended at least 75% of the meetings of the Board
and the Board committees on which they served during 1999, except that Mr.
Norling attended 67% of the meetings of the Board and the Board committees on
which he served.
Directors who are employees of the Company do not receive any special
compensation for their services as directors. Directors who are not employees
of the Company ("Non-employee Directors") receive an annual fee of $25,000
plus $1,500 for each regular meeting of the Board, $750 for each special
meeting of the Board and $750 for each Board Committee meeting. Pursuant to
the Company's 1998 Director Stock Plan (the "Director Plan"), a Non-employee
Director may elect to receive 50% or 100% of the annual fee to be paid in each
calendar year in the form of Common Stock based upon the fair market value of
the Common Stock at the time of the annual meeting. In addition, on the first
business day after the annual meeting of shareholders of the Company, each
Non-employee Director who serves as a member of the Board immediately
following the annual meeting is automatically granted an immediately
exercisable option for the purchase of such number of shares of Common Stock
equal to the annual fee divided by the fair market value of a share of Common
Stock on the day of grant (rounded up to the nearest multiple of 100). In
1999, each Non-employee Director received an option to purchase 500 shares of
Common Stock.
EXECUTIVE COMPENSATION
The following table shows the aggregate compensation, including incentive
compensation, paid by the Company for 1999, 1998 and 1997 to the Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company for 1999:
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation Awards
----------------- Other ---------------------
Annual Restricted Securities All Other
Compen- Stock Underlying Compen-
Name and Principal Salary Bonus(1) sation Awards(2) Options sation(3)
Position Year ($) ($) ($) ($) (#) ($)
- ------------------ ---- ------- --------- ------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jeffrey L. Bleustein
Chairman and CEO....... 1999 653,750 1,307,500 40,661 0 55,000 68,431
Chairman and CEO....... 1998 586,250 1,172,500 41,027 0 130,000 52,621
President and CEO...... 1997 440,260 700,000 37,117 0 116,000 33,171
Donna F. Zarcone
President and COO--
HDFS(4)............... 1999 285,313 378,000 23,705 0 24,065 33,885
James L. Ziemer
Vice President and CFO. 1999 241,939 338,715 21,310 0 20,499 16,935
Vice President and CFO. 1998 227,134 275,000 21,484 0 32,673 14,814
Vice President and CFO. 1997 216,319 212,339 21,549 0 43,142 14,090
James A. McCaslin
Vice President Dealer
Services--Motor
Company............... 1999 254,014 254,014 31,223 0 21,474 18,709
Vice President,
Continuous
Improvement--Motor
Company............... 1998 240,181 211,359 48,745 0 34,549 51,485
Vice President,
Continuous
Improvement--Motor
Company............... 1997 228,744 225,313 28,192 0 25,462 32,360
Gail A. Lione
Vice President, General
Counsel and Secretary. 1999 217,360 217,360 21,606 0 28,376 13,746
Vice President, General
Counsel and Secretary. 1998 206,000 181,280 20,729 0 29,848 5,720
Vice President, General
Counsel and
Secretary(4).......... 1997 33,333 65,667 31,464 0 18,376 35,575
</TABLE>
- --------
(1) The bonuses listed on this table reflect performance of the Chief
Executive Officer and each of the named executive officers in the year
shown. However, bonuses are actually paid in the following calendar year.
(2) As of December 31, 1999, the named executive officers holding unvested
restricted stock were Messrs. Bleustein and McCaslin who held 40,000 and
80,000 shares, respectively, valued at $2,562,500 and $5,125,000,
respectively. Dividends are paid on shares of unvested restricted stock.
(3) The 1999 amounts for Messrs. Bleustein, Ziemer and McCaslin and Ms. Lione
include the value of split dollar life insurance provided by the Company,
a 401(k) matching contribution of $5,000, a $200 health care spending
account credit (Messrs. Bleustein and Ziemer and Ms. Lione only) and a
non-qualified deferred compensation plan matching contribution of $49,788,
$10,508, $0 and $6,959, respectively. The 1999 amounts for Ms. Zarcone
include a 401(k) matching contribution of $1,500 and $32,385 relating to
the reimbursement of interest under the note from Ms. Zarcone to HDFS
described below. See "Certain Transactions."
(4) Ms. Zarcone has been an employee of HDFS, a subsidiary of the Company,
since June 1994, but was not an executive officer of the Company prior to
1999. Ms. Lione was hired by the Company in September 1997.
6
<PAGE>
Stock Options
During 1999, the Human Resources Committee granted options to purchase
shares of Common Stock under the Company's 1995 Stock Option Plan to the Chief
Executive Officer and the other named executive officers as follows:
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants (1) Appreciation for Option Term (2)
-------------------------------------------- --------------------------------
Number of
Securities Percent of
Underlying Total Options Exercise
Options Granted to Price Expiration
Name Granted Employees ($/Sh) Date 0% 5% 10%
---- ---------- ------------- -------- ---------- --- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jeffrey L. Bleustein.... 55,000 7.4% $51.59 2/17/09 $ 0 $ 1,784,589 $ 4,522,498
Donna F. Zarcone........ 24,065 3.2% 51.59 2/17/09 0 780,839 1,978,798
James L. Ziemer......... 20,499 2.7% 51.59 2/17/09 0 665,132 1,685,576
James A. McCaslin....... 21,474 2.9% 51.59 2/17/09 0 696,768 1,765,748
Gail A. Lione (3) ...... 18,376 2.5% 51.59 2/17/09 0 596,247 1,511,008
10,000 1.3% 56.84 8/17/09 0 324,471 822,272
All Optionees........... 753,570 100.0 51.59 2/17/09 0 24,465,764 62,002,965
All Shareholders (4).... N/A N/A N/A N/A 0 4,912,815,625 12,450,039,366
</TABLE>
- --------
(1) The options granted under the 1995 Stock Option Plan are non-qualified
stock options. The exercise 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 three years.
Options expire ten years from the date of grant. Each option granted under
the 1995 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.
(2) The option term is ten years. 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. The potential realizable values are
not intended to forecast possible future appreciation, if any, in the
market price of the Common Stock.
(3) As of February 1999, Ms. Lione also served as the acting Vice President of
Human Resources. On August 18, 1999, the Board of Directors of the Company
awarded Ms. Lione an option to acquire 10,000 shares of Common Stock at an
exercise price of $56.84 as compensation for her additional
responsibilities as Vice President of Human Resources.
(4) Represents corresponding gain to all shareholders on 151,421,329 shares of
Common Stock outstanding on February 18, 1999, the date on which
substantially all of the options included in the table were granted,
calculated based on the fair market value of such Common Stock on such
date.
Shown below is information relating to the exercise of options by the Chief
Executive Officer and the other named executive officers during 1999 and the
value of unexercised Company options held by such persons as of December 31,
1999.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN 1999
AND OPTION VALUES AT DECEMBER 31, 1999
Common Stock
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options At At December 31, 1999
Shares Value December 31, 1999 (#) ($)(2)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey L. Bleustein.... 0 $ 0 368,444 231,000 $17,662,645 $7,579,882
Donna F. Zarcone........ 0 0 0 24,065 0 300,059
James L. Ziemer......... 0 0 109,306 77,436 5,115,587 2,554,694
James A. McCaslin....... 2,000 79,378 89,858 67,099 4,267,579 2,054,670
Gail A. Lione........... 5,000 143,203 12,462 60,762 448,426 1,461,257
</TABLE>
- --------
(1) Value based on the fair market value of Common Stock on the date of
exercise less the option exercise price.
(2) Value based on a fair market value of Common Stock of $64.06 on December
31, 1999, less the option exercise price.
HDFS Class A Common Stock
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options At In-the-Money Options
Shares Value December 31, 1999 (#) At December 31, 1999 ($)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donna F. Zarcone........ 17,000 $1,052,300 0 0 N/A N/A
</TABLE>
Retirement Benefits
The following table shows at different levels of remuneration and years of
credited service the estimated net annual benefits payable as a straight life
annuity to each of the named executive officers (other than Ms. Zarcone) under
the Salaried Pension Plan, the Restoration Plan and the Supplemental
Agreements (all as defined below), assuming retirement at age 62:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------
Total Pay ($) 5 10 15 20 25 30 35 15+(1)
- ------------- ------ ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
200,000....... 15,269 30,539 45,808 61,078 76,347 91,617 106,886 100,000
300,000....... 23,269 46,539 69,808 93,078 116,347 139,617 162,886 150,000
400,000....... 31,269 62,539 93,808 125,078 153,347 187,617 218,886 200,000
500,000....... 39,269 78,539 111,808 157,078 196,347 235,617 274,886 250,000
600,000....... 47,269 94,539 144,808 189,078 236,347 283,617 330,886 300,000
800,000....... 63,269 126,539 189,808 253,078 316,347 379,617 442,886 400,000
1,000,000....... 79,269 158,539 237,808 317,078 396,347 475,617 554,886 500,000
1,250,000....... 99,269 198,539 297,808 397,078 496,347 595,617 694,886 625,000
</TABLE>
- --------
(1) This column applies only to Messrs. Bleustein, Ziemer and McCaslin who are
entitled to supplemental benefits under their Supplemental Agreements upon
retirement at age 62.
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 HDFS and certain other subsidiaries), including the Messrs.
8
<PAGE>
Bleustein, Ziemer and McCaslin and Ms. Lione, 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 the difference between 1.6% of the
final average earnings and .9% of the primary monthly social security benefit
multiplied by years of service. On and after December 31, 1994, the revised
benefit is 1.2% of the final average earnings plus .4% of the final average
earnings in excess of Social Security covered compensation 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 Ms. Zarcone), 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. HDFS does not provide a non-contributory defined
benefit pension plan to any of its employees.
The Company has adopted the 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, 1999, annualized final average earnings and years of credited service
under the Salaried Pension Plan and the Restoration Plan were as follows:
$1,027,546 and 28.9 years, respectively, for Mr. Bleustein; $403,703 and 24.2
years, respectively, for Mr. Ziemer; and $410,603 and 7.3 years, respectively,
for Mr. McCaslin. As of December 31, 1999, Ms. Lione had not completed 5 years
of service.
The Company has Supplemental Executive Retirement Plan Agreements (the
"Supplemental Agreements") with Messrs. Bleustein, Ziemer and McCaslin. Under
the Supplemental Agreements, a participant who retires at or after age 55 with
15 years of service 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.
Agreements
The Company has entered into an employment agreement with Mr. Bleustein
which provides that, upon termination of employment for reasons other than
cause, the Company will pay Mr. Bleustein certain amounts, including his 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, together with other
benefits to which he was entitled prior to termination. HDFS has entered into
an employment agreement with Ms. Zarcone which provides that, upon termination
of employment for reasons other than cause, HDFS will pay Ms. Zarcone certain
amounts, including her 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, together with other benefits to which she was entitled prior to
termination. Such employment agreements do not establish minimum base salary
levels for Mr. Bleustein or Ms. Zarcone.
The Company offers a standard form of Severance Benefits Agreement to
certain executives. Messrs. Bleustein, Ziemer and McCaslin and Ms. Lione have
executed this agreement. The Severance Benefits Agreement provides for up to
one year's salary and up to one year of certain employee benefits in the event
of a termination of employment by the Company other than for cause.
9
<PAGE>
The Company has entered into transition agreements with the named executive
officers and certain other key executives 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) within two years (three years in
the case of Mr. Bleustein) 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 (i) the individual's highest annual base salary
during the five-year period preceding termination, (ii) the highest annual
bonus paid during the five-year period preceding termination and (iii) the
individual's annual perquisite payment. Such individuals will also receive
immediate vesting in any retirement, incentive, stock option and other
deferred compensation plans. In addition, the covered individuals will receive
three years of continued medical benefits and outplacement services. 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, then 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 in office immediately prior to a proposed action determine that the
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 nominated or elected
by two-thirds of the continuing directors (except in the case of an actual or
threatened proxy or control contest).
Certain executives, including Messrs. Bleustein, Ziemer and McCaslin and
Ms. Lione, are entitled to receive a lump sum payment equal to one year's
salary plus applicable taxes upon retirement at or after age 55. This benefit
has been adopted by the Company in lieu of providing post-retirement life
insurance. The Company has entered into a Supplemental Executive Retirement
Plan Agreement with certain executives as described above under "Retirement
Benefits."
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 1999 as they affect 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 and in addition to
benefit plans available to salaried employees generally, the Company's
executive compensation policies, plans and programs consist of base salary,
annual incentive compensation, annual stock option grants, annual perquisite
payments, the Restoration Plan, the Supplemental Agreements, a non-qualified
deferred compensation plan and life insurance benefits.
10
<PAGE>
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 independent human resources consultants in
making its executive compensation decisions. Each year the Company's Human
Resources staff selects several executive or other officer positions for
benchmarking against comparable companies. The Human Resources staff and the
independent human resources consultant retained by the Company jointly select
the comparable companies. The independent human resources consultant analyzes
compensation summary data for the specified types of executive or officer
positions at the comparable companies and prepares a written analysis
(collectively, the "Independent Compensation Analysis"). The Independent
Compensation Analysis includes base salary (including the percentage increase
over the prior year), annual bonus percentage and 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 officer positions.
The comparable companies used to benchmark executive compensation are not
included on the Performance Graph 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 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 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 at or below the median amounts
paid to executives with similar qualifications, experience and
responsibilities at other comparable businesses. Executives' base 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.
1999 Base Salary
Executive base salaries are reviewed annually. In February 1999, the Human
Resources Committee, in consultation with the Vice President, Human Resources,
increased Mr. Bleustein's base salary by approximately 11%. Mr. Bleustein's
salary was increased to be competitive with the median salary levels of chief
executive officers as stated in the Independent Compensation Analysis and was
based upon the Human Resources Committee's subjective assessment of Mr.
Bleustein's past performance (including his leadership and his role in the
financial performance of the Company) and its expectations for his future
contribution in leading the Company. Also in February 1999, the Human
Resources Committee reviewed, with the Chief Executive Officer and the Vice
President, Human Resources, 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 Company's Human
Resources staff under the direction of the Chief Executive Officer of the
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 Analysis. 1999 base salaries for
the named executive officers are set forth in the Summary Compensation Table.
Based on the Independent Compensation Analysis, the Human Resources Committee
believes that the base salaries paid to the Company's executive officers are
generally at or below the median of base salaries paid to comparable executive
officers of comparable companies.
11
<PAGE>
1999 Incentive Cash Compensation
The Company and its affiliates have three separate short term incentive
plans in which executive officers participated for 1999: Messrs. Bleustein and
Ziemer participated in the Company's Corporate Short Term Incentive Plan (the
"Corporate STIP"); the other named executive officers, excluding Ms. Zarcone,
and certain other executive officers participated in the Motor Company 1999
Short Term Incentive Plan (the "Motor Company STIP"); and Ms. Zarcone
participated in the HDFS Short Term Incentive Compensation Plan ("HDFS STIP").
In December 1998, the Human Resources Committee reviewed and approved the
Motor Company STIP for 1999 and target awards for participants in the Motor
Company STIP. Also in December 1998, the Human Resources Committee established
the performance target and target awards under the Corporate STIP for 1999 for
participating executives. In December 1998, the board of directors of HDFS
established performance targets and target awards under the HDFS STIP, and in
February 1999, the Human Resources Committee reviewed and confirmed those
performance targets and target awards. Award payouts under the Motor Company
STIP were based upon Motor Company financial targets related to earnings
before interest and taxes (weighted 70%) and Motor Company objectively
measured strategic targets related to product quality. The resulting
performance payout for 1999 under the Motor Company STIP was 200% of target
award. Award payouts under the HDFS STIP were based on the percentage increase
in net income and rate of return on equity. The resulting performance payout
for 1999 under the HDFS STIP was 187% of target award. The target awards for
the five named executive officers ranged from 50% to 100% of their respective
1999 base salaries (the "Individual Target Award"). Mr. Bleustein's Individual
Target Award for 1999 was 100% of his base annual salary. The amount of each
executive's Individual 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.
The Human Resources Committee selected consolidated net income as the sole
performance criterion for the 1999 Corporate STIP formula. This mathematical
formula would have provided a bonus of 290% of the Individual Target Award.
The terms of the Corporate STIP, as modified by the shareholders in May 1999,
limit the total dollar payment to any one individual to $2 million per year.
Under the terms of the Corporate STIP, the Human Resources Committee also has
the discretion to reduce awards determined by the formula by up to 50%. While
the terms of the Corporate STIP do not limit the performance percentage, the
Human Resources Committee set an upper limit of the Performance Percentage for
Plan Year 1999 at 200%. Given these terms and limitations, the Human Resources
Committee determined that Mr. Bleustein's actual 1999 Corporate STIP award
would be the maximum amount of $1,307,500. The awards for the other executive
officers were determined mathematically, subject to certain maximum
limitations, under the respective plans applicable to each of them. All short
term incentive plan awards paid or payable for 1999 by the Company with
respect to the CEO and the named executive officers are set forth in the
Summary Compensation Table.
1999 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. 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, including the grant to the Chief Executive Officer, 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 1999 are set forth in the Summary Compensation and
Option Grants Tables.
12
<PAGE>
Other Compensation
The Human Resources Committee believes that the compensation paid or
payable pursuant to the Company's annual perquisite payments, Restoration
Plan, Supplemental Agreements, non-qualified deferred compensation plan, life
insurance benefits and the benefit plans available to salaried employees
generally is competitive with the benefit packages offered by comparable
employers. From time to time the Human Resources Department of the Motor
Company obtains data to ensure that such benefit plans and programs remain
competitive. The Human Resources Committee most recently reviewed such data in
December 1995.
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). Compensation paid under the
Company's stock option plans and the Corporate STIP qualifies as incentive
compensation under Section 162(m). It is the Human Resources Committee's
intention to utilize incentive compensation as a substantial component of the
Company's executive compensation program and to attempt to structure the
payment of compensation so that the Company will not lose deductions under
Section 162(m). There is a substantial likelihood, however, that the Company
will not be entitled to deduct a substantial portion of the compensation
arising out of the vesting of the restricted stock granted to Messrs.
Bleustein and McCaslin prior to 1999 (See footnote 2 to Summary Compensation
Table). These grants of restricted stock were not structured as incentive
compensation under Section 162(m).
Conclusion
Over the last five calendar years, shareholders of the Company have enjoyed
a total return of 369%. During that same period of time the Standard & Poor's
500 and MidCap 400 Indexes had total returns of 251% and 182%, respectively,
as illustrated in the performance graph below. 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).
Richard G. LeFauve, Chairman
Barry K. Allen
Richard J. Hermon-Taylor
[The remaining portion of this page is intentionally left blank]
13
<PAGE>
PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return*
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 the 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 Appears Here]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harley-Davidson, Inc. $100.00 $103.36 $169.86 $198.08 $345.93 $469.09
- ------------------------------------------------------------------------
S&P MidCap 400 100.00 130.95 156.14 206.47 245.89 282.01
- ------------------------------------------------------------------------
S&P 500 100.00 137.58 169.17 225.60 290.08 351.11
</TABLE>
- --------
*Assumes $100 invested on December 30, 1994.
14
<PAGE>
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 distributor of the Company's motorcycles in Canada. In 1999,
Deeley Imports paid the Company approximately $79 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 arm's-length negotiation. The Company
anticipates that it will do a similar amount of business with Deeley Imports
in 2000.
Mr. Beattie, a director of the Company, is a partner and Chairman of the
Executive Committee of Simpson Thacher & Bartlett, a law firm. Simpson Thacher
& Bartlett served as outside counsel for the Company in various legal matters
during 1999, with aggregate fees paid in 1999 not exceeding $90,000. The
Company anticipates that it will continue to utilize Simpson Thacher &
Bartlett as outside counsel for various legal matters in 2000.
On April 30, 1999, Ms. Zarcone, the Chief Operating Officer and President
of HDFS, executed a promissory note in favor of HDFS in the principal amount
of $1,188,793 (which was the highest amount of such indebtedness outstanding
during 1999) to exercise options to purchase shares of HDFS stock. The note
bore interest at a rate of 4.67%. On November 30, 1999, the Company acquired
all of the stock of HDFS that it did not already own from the minority
shareholders of HDFS, including Ms. Zarcone. The Company purchased 17,000
shares of HDFS Class A common stock from Ms. Zarcone at a price of $160.78 per
share, which price was determined based on arm's length negotiations between
the Company and the minority shareholders of HDFS. At that time, Ms. Zarcone
repaid the note, and as reflected in the Summary Compensation Table, the
Company reimbursed to her the corresponding interest.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1933, the Company's
directors and executive officers are required to disclose their holdings of
and transactions in the Common Stock on forms prescribed by the Securities and
Exchange Commission. The Company believes that all of the Company's directors
and executive officers complied with their obligations under Section 16(a)
during 1999.
2--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, 1999.
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 the Company's 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
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, then 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 the independent auditors of the Company for the fiscal year ending December
31, 2000, unless the shareholder specifies otherwise.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF THE SELECTION OF ERNST &
YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
15
<PAGE>
3--OTHER MATTERS
Neither the Board of Directors nor management intends to bring before the
Annual Meeting any matters other than those referred to in the Notice of
Annual Meeting and this Proxy Statement. Management is aware that one
shareholder may present a proposal at the Annual Meeting concerning the
Company's warranty policies. The Company was not required to include this
shareholder proposal in this Proxy Statement pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934. If the shareholder properly brings the
proposal before the Annual Meeting, it is intended that the persons named in
the proxy forms will use their discretionary authority to vote against such
proposal. If any other matters shall properly come before the Annual Meeting,
it is the intention of the persons named in the proxy forms to vote the shares
represented by each such proxy in accordance with their judgment on such
matters.
The Company may solicit proxies on behalf of the Board by personal
interview, Internet, telephone, telegraph and facsimile machine, as well as by
use of the mails. The Company will request banks, brokerage houses and other
custodians, nominees or fiduciaries to forward soliciting materials to their
principals and to obtain authorization for the execution of proxies, and the
Company will reimburse them for the out-of-pocket expenses they incur.
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. The Company will bear the cost of
soliciting proxies by the Board as described above, including the cost of
printing this Proxy Statement and any other Board soliciting materials.
SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at the 2001 annual meeting
of shareholders and desires to seek to have the Company include that proposal
in the Company's proxy materials for that meeting pursuant to Rule 14a-8 under
the Securities Exchange Act of 1934, as amended ("Rule 14a-8"), then the
shareholder must ensure that the Company receives the proposal no later than
November 27, 2000.
A shareholder who otherwise intends to present business at the 2001 meeting
must comply with the requirements set forth in the Company's Restated Articles
of Incorporation (the "Articles of Incorporation"). The Articles of
Incorporation state, among other things, that to bring business before an
annual meeting, a shareholder must give written notice that complies with the
Articles of Incorporation to the Secretary of the Company not less than 60
days in advance of the date in the current fiscal year of the Company
corresponding to the date the Company released its proxy statement to
shareholders in connection with the annual meeting for the immediately
preceding year. Thus, since the Company anticipates mailing this proxy
statement on March 27, 2000, the Company must receive notice of a shareholder
proposal submitted other than pursuant to Rule 14a-8 by January 26, 2001.
If the notice is received after January 26, 2001, then the notice will be
considered untimely and the Company is not required to present such proposal
at the 2001 annual meeting. If the Board chooses to present a proposal
submitted other than pursuant to Rule 14a-8 at the 2001 annual meeting, then
the persons named in the proxies solicited by the Board for the 2001 annual
meeting may exercise discretionary voting power with respect to such proposal.
By Order of the Board of Directors,
Gail A. Lione
Secretary
Milwaukee, Wisconsin
March 27, 2000
16
<PAGE>
HARLEY DAVIDSON, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR APRIL 29, 2000 ANNUAL MEETING OF SHAREHOLDERS
The undersigned appoints each of Jeffrey L. Bleustein and James L. Ziemer
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 April 29, 2000 and at any
adjournment thereof (the "Meeting"), according to the number of votes that the
undersigned would be entitled to vote if personally present.
Without limiting the generality hereof, each of such persons is authorized to
vote:
(a) as herein specified upon the proposals listed hereon and described in the
Proxy Statement for the Meeting; and
(b) in his discretion upon any other matter that may properly come before the
Meeting.
The Board of Directors recommends a vote FOR the nominees as directors (Item 1.)
and ratification of Ernst & Young LLP as auditors (Item 2.).
The shares represented by this Proxy shall be voted as specified. If no
specification be made, the shares shall be voted as recommended by the Board of
Directors.
(SEE REVERSE SIDE TO VOTE)
<PAGE>
THERE ARE THREE WAYS FOR YOU TO APPOINT YOUR PROXY
As a shareholder you can now help your company save both time and expense by
appointing your proxy over the Internet or by touch tone phone.
If you hold Harley-Davidson shares through your broker, you will receive voting
information on those shares from your broker.
OPTION 1: Call toll free 1-877-482-8153 using a touch tone phone 24 hours a
--------- day, 7 days a week. You will be asked to enter the Control Number
VOTE BY listed below. By entering the Control Number and finishing the
TELEPHONE call, the effect will be the same as if you had completed the
proxy card to appoint your proxy and communicate your voting
instructions. After entering the Control Number, if you wish to
instruct your proxy to vote as recommended by the Board of
Directors, simply press 1. That's all there is to it...End of
call. If you do not wish to instruct your proxy to vote as the
Board recommends you need only respond to a few simple prompts.
THERE IS NO CHARGE FOR THIS CALL. (Do not return your proxy card
if you vote by phone.)
YOUR CONTROL NUMBER IS:
OPTION 2: Access https://www.css2.sungard.com/Finstar/InterLink?pbProxy
----------- Voting=1
VOTE ON THE Follow the simple instructions. (Do not return your proxy card if
INTERNET you vote on the Internet)
YOUR PROXY NUMBER IS:
YOUR ISSUE NUMBER IS:
YOUR ACCOUNT NUMBER IS:
OPTION 3: If you do not wish to appoint your proxy by touch tone phone or
--------- the Internet, please complete and return the proxy card.
MAIL YOUR
PROXY CARD [LOGO] [LOGO]
PLEASE MARK, SIGN AND DATE BELOW,
. DETACH AND RETURN PROMPTLY USING THE ENVELOPE PROVIDED .
HARLEY-DAVIDSON, INC. ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS: 01 - Jeffrey L. Bleustein 02 - Donald A. James [_] FOR all nominees [_] WITHHOLD AUTHORITY
03 - James A. Norling listed to the left (except to vote for all
as specified below). nominees listed to
the left.
</TABLE>
<TABLE>
<CAPTION>
(Instructions: To withhold authority to vote for any nominee(s), write the number(s) [__________________________________________]
of the nominee(s) in the box provided to the right.)
<S> <C> <C> <C>
2. RATIFICATION OF AUDITORS: [_] FOR [_] AGAINST [_] ABSTAIN
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Check appropriate box Date ________________________
indicate changes below:
Address Change? [_] Name Change? [_] [ ]
[__________________________________________]
Signature(s) in Box
IMPORTANT: Please sign your name exactly as it
appears on this Proxy. Joint accounts should
each sign personally. A corporation should sign
in full corporate name by duly authorized
officers. When signing as attorney, executor,
administrator, trustee or guardian, please give
your full title as such.
</TABLE>
