-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B0xf8QT0yXj+OvMFTmbj8cqQXW6PuG82JkPGFKF/BeZn7DuyS3aHJ97HGgQ6APYV SNjygXPLaCETOjlpYr236g== 0000897069-96-000131.txt : 19960517 0000897069-96-000131.hdr.sgml : 19960517 ACCESSION NUMBER: 0000897069-96-000131 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARLEY DAVIDSON INC CENTRAL INDEX KEY: 0000793952 STANDARD INDUSTRIAL CLASSIFICATION: MOTORCYCLES, BICYCLES & PARTS [3751] IRS NUMBER: 391382325 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09183 FILM NUMBER: 96566883 BUSINESS ADDRESS: STREET 1: 3700 W JUNEAU AVE CITY: MILWAUKEE STATE: WI ZIP: 53208 BUSINESS PHONE: 4143424680 10-Q 1 HARLEY-DAVIDSON, INC. FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1996 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to ______________ Commission File Number 1-9183 Harley-Davidson, Inc. (Exact name of registrant as specified in its Charter) Wisconsin 39-1382325 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3700 West Juneau Avenue, Milwaukee, Wisconsin 53208 (Address of principal executive offices) (Zip Code) (414) 342-4680 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock Outstanding as of May 3, 1996: 75,488,241 Shares HARLEY-DAVIDSON, INC. Form 10-Q Index For the Quarter Ended March 31, 1996 Page Part I. Financial Information Item 1. Financial Statements Condensed Consolidated Statements of Operations 3 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 Part II. Other Information Item 1. Legal Proceedings 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 Exhibit Index 14 PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Harley-Davidson, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three months ended March 31, March 26, 1996 1995 Sales $371,051 $294,886 Cost of goods sold 255,274 204,495 -------- -------- Gross profit 115,777 90,391 Operating income from financial services 1,732 651 Selling, administrative and engineering expenses (63,484) (51,785) --------- -------- Income from operations 54,025 39,257 Interest income (expense) - net (405) 339 Other income (expense) - net (1,249) (1,963) --------- --------- Income from continuing operations before provision for income taxes 52,371 37,633 Provision for income taxes 19,377 13,818 --------- --------- Income from continuing operations 32,994 23,815 Loss from discontinued operations, net of tax - (184) ---------- --------- Net income $ 32,994 $ 23,631 ======== ======== Weighted average common shares outstanding 75,113 76,060 ====== ====== Net income per common share: Income from continuing operations $0.44 $0.31 Loss from discontinued operations, net of tax - - ------ ----- Net income $0.44 $0.31 ===== ===== Cash dividends per share $0.05 $0.04 ===== ===== Harley-Davidson, Inc. Condensed Consolidated Balance Sheets (In thousands) ASSETS March 31, Dec. 31, March 26, 1996 1995 1995 (Unaudited) (Unaudited) Current assets: Cash and cash equivalents $ 39,577 $ 31,462 $ 19,295 Accounts receivable, net 157,786 134,210 144,296 Inventories (Note 2) 85,758 84,427 101,957 Notes receivable 12,000 - - Other current assets 29,128 30,591 22,536 Net assets from discontinued operations 22,833 56,548 56,848 -------- ------- -------- Total current assets 347,082 337,238 344,932 Finance receivables, net 270,762 213,444 - Property, plant and equipment, net 293,270 284,775 219,188 Goodwill 42,643 43,256 - Other assets 82,177 66,949 64,844 Net assets from discontinued operations 26,981 55,008 54,873 --------- --------- -------- $1,062,915 $1,000,670 $683,837 ========= ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 1,020 $ 2,327 $ 23,761 Current maturities of long-term debt 278 364 218 Accounts payable 97,790 102,563 48,650 Accrued expenses and other 118,877 127,956 103,693 --------- --------- --------- Total current liabilities 217,965 233,210 176,322 Finance debt 196,657 164,330 - Postretirement health care benefits 63,980 63,570 61,273 Other long-term liabilities 50,746 44,991 29,939 Contingencies (Note 5) Total shareholders' equity 533,567 494,569 416,303 --------- -------- -------- $1,062,915 $1,000,670 $683,837 ========== ========= ======== Harley-Davidson, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three months ended March 31, March 26, 1996 1995 Cash flows from operating activities: Net income $ 32,994 $ 23,631 Depreciation and amortization 12,122 8,949 Long-term employee benefits 1,258 2,119 Other-net 1,490 (55) Net change in discontinued operations 4,953 (5,328) Net change in other current assets and current liabilities (37,296) (40,797) ------- ------- Net cash provided by (used in) operating activities 15,521 (11,481) Cash flows from investing activities: Purchase of property and equipment (19,884) (14,018) Finance receivables acquired or originated (274,435) - Finance receivables collected/sold 216,507 - Proceeds from disposition of discontinued segment 23,350 - Net change in discontinued operations (3,338) (2,234) Other - net (7,492) 2,758 -------- ------- Net cash used in investing activities (65,292) (13,494) Cash flows from financing activities: Reduction of long-term debt (2,146) (127) Net increase (decrease) in notes payable (1,307) 22,675 Net increase in finance debt 32,327 - Dividends paid (3,899) (3,048) Stock repurchases - (39,972) Issuance of stock under employee stock and option plans 11,134 131 Net change in discontinued operations 21,777 6,727 -------- -------- Net cash provided by (used in) financing activities 57,886 (13,614) -------- -------- Net increase (decrease) in cash and cash equivalents 8,115 (38,589) Cash and cash equivalents: At beginning of period 31,462 57,884 -------- -------- At end of period $ 39,577 $ 19,295 ======== ======== HARLEY-DAVIDSON, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1 - Basis of Presentation and Use of Estimates The condensed interim consolidated financial statements included herein have been prepared by Harley-Davidson, Inc. (the "Company") without audit. Certain information and footnote disclosures normally included in complete financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission and generally accepted accounting principles for interim financial information. However, the foregoing statements contain all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of Company management, necessary to present fairly the consolidated financial position as of March 31, 1996 and March 26, 1995, and the results of operations for the three-month periods then ended. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. The operations of Holiday Rambler are classified as discontinued operations. As such, certain prior-year balances have been reclassified in order to conform to current-year presentation. On November 14, 1995, the Company acquired substantially all of the common stock and common stock equivalents of Eaglemark Financial Services, Inc. (Eaglemark) that it did not already own. The Company has included the results of operations of Eaglemark in its statement of operations for the three months ended March 26, 1995 as though it had been acquired at the beginning of the year and deducted the preacquisition earnings as part of non-operating expense. Prior to December 31, 1995, the Company accounted for its investment in Eaglemark using the equity method. The carrying value of its investment in Eaglemark was approximately $9.6 million and is included in other assets at March 26, 1995. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Note 2 - Inventories The Company values its inventories at the lower of cost, principally using the last-in, first-out (LIFO) method, or market. Inventories consist of the following (in thousands): March 31, Dec. 31, March 26, Components at the lower of cost, 1996 1995 1995 first-in, first-out (FIFO), or market: Raw material & work-in- process $ 30,328 $ 32,284 $ 32,438 Finished goods 19,236 19,290 31,626 Parts & accessories 56,023 52,182 56,027 -------- ------- --------- 105,587 103,756 120,091 Excess of FIFO over LIFO 19,829 19,329 18,134 -------- ------- --------- Inventories as reflected in the accompanying condensed consolidated balance sheets $ 85,758 $ 84,427 $101,957 ======= ======= ======= Note 3 - Capital Stock The Company has continuing authorization from its Board of Directors to repurchase up to 4 million shares of the Company's outstanding common stock. During the first quarter of 1995, the Company repurchased 1,650,000 shares of its common stock with cash on hand and short-term borrowings. Note 4 - Supplemental noncash investing activities On March 6, 1996, the Company sold substantially all of the assets of its Holiday Rambler Recreational Vehicles Division to Monaco Coach Corporation ("Monaco"). Total consideration consisted of approximately $23 million in cash, $3 million in preferred stock of Monaco, a $12 million note from a Monaco subsidiary guaranteed by Monaco and assumption by Monaco of certain liabilities of the acquired operations in the approximate amount of $47 million. Note 5 - Contingencies The Company is involved with government agencies in various environmental matters, including a matter involving soil and groundwater contamination at its York, Pennsylvania facility (the Facility). The Facility was formerly used by the U.S. Navy and AMF (the predecessor corporation of Minstar). The Company purchased the Facility from AMF in 1981. Although the Company is not certain as to the extent of the environmental contamination at the Facility, it is working with the Pennsylvania Department of Environmental Resources in undertaking certain investigation and remediation activities. In March 1995, the Company entered into a settlement agreement (the Agreement) with the Navy. The Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%, respectively, of future costs associated with investigation and remediation activities at the Facility (response costs). The trust will administer the payment of the future response costs at the Facility as covered by the Agreement. In addition, in March 1991 the Company entered into a settlement agreement with Minstar related to certain indemnification obligations assumed by Minstar in connection with the Company's purchase of the Facility. Pursuant to this settlement, Minstar is obligated to reimburse the Company for a portion of its response costs at the Facility. Although substantial uncertainty exists concerning the nature and scope of the environmental remediation that will ultimately be required at the Facility, based on preliminary information currently available to the Company and taking into account the Company's settlement agreement with the Navy and the settlement agreement with Minstar, the Company estimates that it will incur approximately $5 million of net additional response costs at the Facility. The Company has established reserves for this amount. The Company's estimate of additional response costs is based on reports of environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to complete the necessary investigation and remediation activities. Response costs are expected to be incurred over a period of approximately 10 years. The reserves established by the Company have not been reduced by potential insurance recoveries and are not discounted. The Company has put certain of its insurance carriers on notice that it intends to make claims relating to the environmental contamination at the Facility. However, the Company is currently unable to determine the probable amount of recovery available, if any, under insurance policies. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations for the Three Months Ended March 31, 1996 Compared to the Three Months Ended March 26, 1995 For the quarter ended March 31, 1996, consolidated net sales totaled $371.1 million, a $76.2 million or 25.8% increase over the same period last year. Net income and earnings per share for 1996 were $33.0 million and $.44 on 75.1 million shares outstanding versus $23.6 million and $.31 on 76.1 million shares outstanding in 1995, increases of 39.6% and 41.9%, respectively. All 1995 financial data have been restated to reflect the classification of the Company's Transportation Vehicles segment to that of a discontinued operation, as announced on January 22, 1996. All Harley- Davidson, Inc. sales are generated by the Motorcycles and Related Products ("Motorcycles") segment. Motorcycle Unit Shipments and Net Sales For the Three Month Periods Ended March 31, 1996 and March 26, 1995 Incr 1996 1995 (Decr) % Motorcycle units (excluding Buell) 30,071 23,651 6,420 27.1% Net sales (in millions): Motorcycles (excluding Buell) $297.0 $224.8 $72.2 32.1% Motorcycle Parts and Accessories 68.1 65.5 2.6 4.0 Other 6.0 4.6 1.4 30.4 Total Motorcycles and Related Products $371.1 $294.9 $76.2 25.8% The Motorcycles segment reported record first quarter net sales. Net sales increases were primarily driven by a 27.1% increase in motorcycle unit shipments. The increase in motorcycle unit shipments over the first quarter of 1995 was due to more production days versus the same period last year and higher average daily production rates. Sales of Buell motorcycles (which are distributed through select Harley- Davidson dealers) increased to $4.6 million in 1996 as compared to $3.6 million in 1995. (Included in "Other" in the above table.) During the first quarter of 1996, motorcycle production averaged 470 units per day. The Company announced that it increased daily motorcycle production to an average of 485 units per day starting the first day of the second quarter. Parts and Accessories revenue of $68.1 million was up only $2.6 million or $4.0% compared to the first quarter of 1995. The combined sales of Genuine Motor Parts and Genuine Motor Accessories were up 23.0% compared to last year however, MotorClothes sales were down 23.0%. The Company anticipates that overall Parts and Accessories revenue growth for 1996 will approximate the growth rate in motorcycle unit shipments as the demand for Genuine Motor Parts and Genuine Motor Accessories remains strong. Due to the softening in demand for the MotorClothes product line, the Company expects 1996 MotorClothes sales to be down from 1995. Gross Profit Gross profit increased $25.4 million, or 28.1%, compared to the first quarter of 1995 primarily due to an increase in motorcycle volume. The gross profit margin was 31.2% in 1996 as compared with 30.7% in 1995. The increase in the gross profit percentage was due to a shift in mix from the lower margin Sportster model, a decrease in overtime and a shift in mix from MotorClothes to Genuine Motor Parts. Operating Expenses For the Three Month Periods Ended March 31, 1996 and March 26, 1995 (Dollars in Millions) Incr 1996 1995 (Decr) % Motorcycles and Related Products $61.0 $49.9 $11.1 22.2% Corporate 2.5 1.9 .6 31.6 Total operating expenses $63.5 $51.8 $11.7 22.6% Operating expenses increased $11.7 million, or 22.6%, compared to the first quarter of 1995. The increase was largely related to increased motorcycle volumes and an increase in engineering expenses when compared to the same period last year. Operating income from financial services The results of operations of the Financial Services segment were $1.7 million and $.7 million in 1996 and 1995, respectively. Consolidated income taxes The Company's effective income tax rate for the first quarter of 1996 approximated 37.0% compared to 36.7% during the first quarter of 1995. Discontinued operations The operations for the Transportation Vehicles segment have been classified as discontinued operations. The sale of the Recreational Vehicles division and ten of the fourteen Holiday World stores was completed in the first quarter of 1996 (the remaining four stores will be disposed of by the Company in due course). The disposition of the remaining businesses (Commercial Vehicles division and B&B Molders) is expected to be finalized during 1996. Environmental The Company's policy is to comply with all applicable environmental laws and regulations, and the Company has a compliance program in place to monitor, and report on, environmental issues. The Company has reached settlement agreements with its former parent (Minstar, successor to AMF Incorporated) and the U.S. Navy regarding groundwater remediation at the Company's manufacturing facility in York, Pennsylvania and currently estimates that it will incur approximately $5 million of net additional costs related to the remediation effort. The Company has established reserves for this amount. See Note 5 of the notes to condensed consolidated financial statements. Recurring costs associated with managing hazardous substances and pollution in on-going operations are not material. The Company regularly invests in equipment to support and improve its various manufacturing processes. While the Company considers environmental matters in capital expenditure decisions, and while some capital expenditures also act to improve environmental compliance, only a small portion of the Company's annual capital expenditures relate to equipment which has the sole purpose of meeting environmental compliance obligations. The Company anticipates that capital expenditures for equipment used to limit hazardous substances/ pollutants during 1996 will approximate $1 million. The Company does not expect that these expenditures related to environmental matters will have a material effect on future operating results or cash flows. Liquidity and Capital Resources During the first quarter, the Company had an increase in cash of approximately $8 million compared to December 31, 1995. The Motorcycles segment generally experiences increases in receivable balances during the first quarter over prior year-end balances due to the annual December shut-downs. The Motorcycles segment's receivable balances also increased as a result of motorcycle volume increases. The results of discontinued operations, including the sale of the Recreational Vehicles Division, had a positive impact on cash flows of approximately $47 million. This was offset by the finance receivable activity which impacted cash flows for the first time since the acquisition of the remaining interest in Eaglemark in November, 1995. The related finance debt increased approximately $32 million as the motorcycle and marine retail activity began their seasonal increase. Capital expenditures amounted to $19.9 million and $14.0 million during the first quarter of 1996 and 1995, respectively. The Company is pursuing a long-term manufacturing strategy to increase its motorcycle production capacity with a goal of having the capacity to manufacture in excess of 200,000 units per year by 2003. The strategy includes expansion in and near the Company's existing facilities and construction of a new manufacturing facility in Kansas City, Missouri. The following are forward looking statements: Due in part to this strategy, the Company anticipates 1996 capital expenditures will approximate $180-$200 million, and the Company currently estimates that 1997 capital expenditures will be in the range of $160-$180 million and 1998 capital expenditures will be in the range of $120-$140 million. The Company currently estimates it will have the capacity to produce at least 117,000 motorcycles in 1996, 125,000-130,000 units in 1997 and 145,000- 150,000 units in 1998. The Company anticipates it will have the ability to fund all capital expenditures with internally generated funds and short-term financing. The Company's ability to reach these production capacity levels will depend upon, among other factors, the Company's ability to (i) continue to realize efficiencies in the utilization of existing facilities through implementation of innovative manufacturing techniques and other means, (ii) implement additions and changes to existing facilities and (iii) construct the new manufacturing facility such that it will be operational in 1998. However, there is no assurance that the Company will continue to find means to realize additional efficiencies. In addition, the Company could experience delays in making additions and changes to existing facilities and/or constructing the new manufacturing facility as a result of risks normally associated with the construction and operation of new manufacturing facilities, including unanticipated problems in construction, delays in the delivery of machinery and equipment or difficulties in making such machinery and equipment operational, work stoppages, difficulties with suppliers, natural causes or other factors. These risks, potential delays and uncertainties regarding the actual costs of the measures the Company intends to take to implement its strategy could also impact adversely the capital expenditure estimates referred to above. Moreover, there is no assurance that the Company will have the ability to sell all of the motorcycles it has the capacity to produce. The Company (excluding Eaglemark) currently has nominal levels of long- term debt and has available lines of credit of approximately $49 million, of which approximately $47 million remained available at March 31, 1996. Eaglemark finances its business, without guarantees from the Company, through commercial paper, through revolving credit facilities and by securitizing its retail installment loans. Eaglemark issues short-term commercial paper secured by wholesale finance receivables with maximum issuance available of $155 million of which $142.3 million was outstanding at March 31, 1996. Maturities of commercial paper issued range from 1 to 60 days. Eaglemark has in place two revolving credit facilities totalling $110 million to fund primarily the United States and Canadian retail loan originations of which approximately $56 million was outstanding at March 31, 1996. Borrowings under the facilities are secured by, and limited to a percentage of, eligible receivables ranging from 75% to 95% of the outstanding loan balances. During the first quarter, Eaglemark securitized and sold approximately $59 million of its retail installment loans to investors with limited recourse, with servicing rights being retained by Eaglemark. The Company expects the future growth of Eaglemark will be financed from additional capital contributions from the Company and a continuation of its programs of commercial paper and securitizations. The Company has continuing authorization from its Board of Directors to repurchase up to 4 million shares of the Company's outstanding common stock. During the first quarter of 1995, the Company repurchased 1,650,000 shares of its common stock with cash on hand and short-term borrowings of $40 million. On February 19, 1996, the Company's Board of Directors declared a cash dividend of $.05 per share payable March 25, 1996 to shareholders of record March 15. Part II - OTHER INFORMATION HARLEY-DAVIDSON, INC. FORM 10-Q March 31, 1996 Item 1. Legal Proceedings The Company is involved with government agencies in various environmental matters, including a matter involving soil and groundwater contamination at its York, Pennsylvania facility. See footnote 5 to the accompanying condensed consolidated financial statements. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 Harley-Davidson Pension Benefit Restoration Plan 10.2 Form of Supplemental Executive Retirement Plan Agreement between the Registrant and each of Messrs. Bleustein, Gelb, Gray, Hoelter, Teerlink, Werner and Ziemer 27.1 Financial Data Schedule for March 31, 1996 27.2 Restated Financial Data Schedule for March 26, 1995 (b) Reports on Form 8-K The Company filed a current report on Form 8-K dated March 6, 1996 to report under Item 2 the disposition of its Holiday Rambler Recreational Vehicle Division including 10 of its 14 Holiday World Recreational Vehicle Dealerships. Part II - Other Information HARLEY-DAVIDSON, INC. Form 10-Q March 31, 1996 Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HARLEY-DAVIDSON, INC. Date: May 14, 1996 /s/ James L. Ziemer James L. Ziemer Vice President and Chief Financial Officer (Principal Financial Officer) May 14, 1996 /s/ James M. Brostowitz James M. Brostowitz Vice President, Controller (Principal Accounting Officer) and Treasurer Exhibit Index Exhibit No. Description 10.1 Harley-Davidson Benefit Restoration Plan 10.2 Form of Supplemental Executive Retirement Plan Agreement between the Registrant and each of Messrs. Bleustein, Gelb, Gray, Hoelter, Teerlink, Werner and Ziemer 27.1 Financial Data Schedule for March 31, 1996 27.2 Restated Financial Data Schedule for March 26, 1995 EX-10.1 2 EXHIBIT 10.1 BENEFIT RESTORATION PLAN Exhibit 10.1 HARLEY-DAVIDSON PENSION BENEFIT RESTORATION PLAN HARLEY-DAVIDSON MOTOR COMPANY, a Wisconsin corporation, together with its subsidiaries and affiliates participating in the Funded Plan (collectively referred to herein as the "Employer"), hereby establishes the Harley-Davidson Pension Benefit Restoration Plan (the "Plan") effective on the Effective Date as follows: 1. Purpose. The purpose of the Plan is to provide the benefits which an employee of an Employer would have been entitled to receive except for (i) the statutory maximum annual benefit limitations of Code Section 415, (ii) the statutory maximum limitations on pensionable pay provided for in Code Section 401(a)(17), and (iii) the exclusion from the definition of pensionable compensation in the Funded Plan for amounts contributed as a pretax contribution to a nonqualified plan of deferred compensation maintained by an Employer. 2. Definitions. The following terms have the following meanings unless the context clearly indicates otherwise: (a) "Applicable Interest Rate" means the product of one (1.0) minus the applicable maximum tax rate expressed as a decimal multiplied by the preretirement earnings assumption in effect for the Funded Plan at the employee's Retirement Date, expressed as a decimal. The product shall then be rounded up to the nearest hundredth. The "applicable maximum tax rate" means the total of the maximum federal individual income tax, the maximum State of Wisconsin individual income tax, and the Hospital Insurance (Medicare) payroll tax, taking into account the deductibility of state income taxes for federal income tax purposes, to the extent permitted by law and tax rates as they are legally in effect at the relevant time. Any subsequent adjustments which may be made to tax rates or to the Funded Plan's earnings assumption having retroactive effect to such date shall be disregarded. (b) "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 of Directors of Harley-Davidson, Inc.; (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; (iv) at least two-thirds of the continuing directors who are disinterested persons in office immediately prior to any other action proposed to be taken by Harley-Davidson, Inc.'s stockholders or by the Board of Directors of Harley-Davidson, Inc. determine that such proposed action, if taken, would constitute a change of control of Harley-Davidson, Inc., and such action is taken. Continuing director means any person who either was a director of Harley-Davidson, Inc. on the effective date, or was designated before such person's initial election as a director as a "continuing director" by a majority of the continuing directors. (c) "Code" means the Internal Revenue Code of 1986, as it may be amended from time to time. (d) "Committee" means the Retirement Plans Committee appointed by the Board of Directors of Harley-Davidson, Inc. or, if such Committee is unable to fulfill its duties under the Agreement, the Board of Directors of Harley-Davidson, Inc. (e) "Determination Date" means the first day of the month coincident with or immediately following the date on which an employee, who has a valid optional lump sum payment election in effect, terminates employment with the Employer for any reason, other than death, after satisfying the vesting requirements of Section 3. (f) "Earnings" and "Final Average Earnings" have the meanings assigned to such terms by the Funded Plan except that each shall be determined for purposes of this Agreement without regard to the limitations on pensionable earnings imposed by Code Section 401(a)(17) and shall be increased by any amount which would be taxable compensation if such amount were not contributed as a pretax contribution to a nonqualified plan of deferred compensation maintained by an Employer. (g) "Effective Date" means January 1, 1996. (h) "Funded Plan" means the Retirement Annuity Plan for Salaried Employees of Harley-Davidson. (i) "Maximum Benefit" means the maximum monthly benefit payable in the form of a single life annuity which is permitted by the Code to be paid to an employee by the Funded Plan, determined as of the employee's Retirement Date. (j) "Pension Restoration Benefit" means the monthly benefit payable in the form of a single life annuity for the life of the employee equal to an employee's Unrestricted Benefit less the employee's Maximum Benefit. A Pension Restoration Benefit is payable only to an employee who is living on the date payments are to commence to be paid to the employee. For this purpose, normal Pension Restoration Benefit payments are deemed to commence on the employee's Retirement Date and any optional lump sum payment is deemed to commence on the employee's Determination Date. "Annuity," for all purposes hereunder, means periodic payments of income and does not, under any circumstance, suggest or require that a contract from an insurance company will be obtained to provide such periodic payments. (k) "Retirement Date" means the later of the first day of the month coincident with or immediately following the date on which the employee has (i) terminated employment with the Company for any reason other than death after completing five (5) Years of Vesting Service under the Funded Plan and has attained age fifty-five (55), or (ii) the date on which payments commence to be made by the Funded Plan to the employee. (l) "Spouse" means the surviving spouse of the employee, as such term is defined in the Funded Plan. (m) "Unrestricted Benefit" means the Maximum Benefit which would be paid to the employee by the Funded Plan determined as of the employee's Retirement Date based on all of the employee's Earnings and Final Average Earnings, as those terms are specially defined for purposes of this Plan. 3. Vesting. An employee's entitlement to Pension Restoration Benefits hereunder vests and becomes nonforfeitable concurrently, to the extent accrued hereunder, with the vesting in the employee's benefit entitlement under the Funded Plan. 4. Coordination of Pension Benefit Restoration Benefits with SERP . The Pension Restoration Benefit hereunder and any benefit entitlements of the employee under the Harley-Davidson Pension Benefit Restoration Plan shall be coordinated by the Employer so as to have the effect of being benefits provided by a single plan or program. As a result, the same form of benefit payment is required for benefits under each program and the benefits payable under each program may be combined into one payment or check. 5. Pension Restoration Benefit. (a) Amount. The amount of an employee's Pension Restoration Benefit shall be determined in accordance with Section 2(j), above. (b) Form of Payment. Unless the employee has elected the optional lump sum form of payment in accordance with this Section and Section 4, the employee's Pension Restoration Benefit shall be paid in the same form of payment applicable to the payment of benefits to the employee under the Funded Plan. If a periodic payment method other than a single life annuity form of payment is in effect under the Funded Plan, the employee's single life annuity payment hereunder shall be converted to the actuarial equivalent of such benefit on the basis of the Funded Plan's method of determining actuarial equivalency. (c) Commencement of Payment. Unless the employee has elected the optional lump sum form of payment in accordance with this Section and Section 4, payment of the employee's Pension Restoration Benefit shall commence at the same time as payments commence to the Executive under the Funded Plan. (d) Optional Lump Sum Payment. Subject to the requirements of Section 4, the employee may, in accordance with Committee rules and procedures, elect to receive payment of the employee's Pension Restoration Benefit in the form of a single lump sum cash payment amount. Special rules apply to the optional lump sum form of payment with regard to determination of the amount of the payment and when the payment is to be made. i) The amount of the employee's optional lump sum cash payment shall be equal to the present value of the employee's Pension Restoration Benefit determined as of the employee's Determination Date. The present value determination shall be made on the assumption that two hundred forty (240) consecutive monthly Pension Restoration Benefit payments in the form of a single life annuity would otherwise have been made to the employee, commencing on the later of the first day of the month following the employee's attainment of age fifty-five (55) or the employee's Determination Date. The Applicable Interest Rate shall be used to determine present value, including, when the assumed benefit commencement date is later than the Determination Date, discounting the present value determined as of the assumed commencement date to the Determination Date. ii) The payment of any optional lump sum hereunder shall be made as soon as practicable on or after the employee's Determination Date. (e) Optional Lump Sum Payment Election Procedures. Committee rules and procedures governing the election of the optional lump sum form of payment, and revocations of such election, include, but are not limited to, the following: The employee may change the form of payment initially effective hereunder only with the written consent of the Committee. Changes in such election may be made no later than the close of the calendar year preceding the calendar year in which benefit payments are to commence. The Committee has full and complete discretion regarding whether or not to consent to any change in payment method requested by an employee. (f) Small Payment Cash Out Rule. Notwithstanding the foregoing provisions of this Section 5, the Committee is authorized to cash out the present value of benefits, using the methodology described in subparagraph (d), above, where the monthly payments which would otherwise be required to be made are de minimis, as determined by the Committee. 6. Surviving Spouse Death Benefit. (a) Amount and Normal Form. If a vested employee dies before the employee's Retirement Date, or, if the employee has a valid optional lump sum payment election in force, the employee dies before the employee's Determination Date, and the employee has a Spouse who is eligible to receive a preretirement surviving spouse benefit under the Funded Plan, such Spouse shall be entitled to receive a preretirement surviving spouse benefit hereunder. The normal form of payment of the preretirement surviving spouse benefit is monthly payments for the life of the surviving Spouse, equal in amount to the Spouse's monthly preretirement surviving spouse benefit determined using the Funded Plan's methodology for determining preretirement surviving spouse benefits based on the deceased employee's accrued benefits under the Funded Plan immediately prior to death, but determined without regard to the limitations under Code Sections 401(a)(17) and 415, less the applicable maximum preretirement surviving spouse benefit which is payable by the Funded Plan on behalf of the deceased employee. (b) Commencement of Normal Form of Preretirement Surviving Spouse Benefit. Payment of the normal form of payment of a preretirement surviving spouse benefit hereunder shall commence at the same time as the similar benefit commences under the Funded Plan. (c) Optional Lump Sum Payment. If the employee has in effect at the time of the employee's death a valid election to receive the employee's Pension Restoration Benefit in the optional lump sum payment form, any preretirement surviving spouse benefit which is otherwise payable under this Plan shall be paid to the employee's surviving Spouse in the form of a single lump sum cash amount. The single lump sum cash amount shall be equal to the present value of the monthly benefits described in subparagraph (a), above, and shall be determined on the assumption that two hundred forty (240) consecutive monthly benefit payments would otherwise be made, commencing on the later of the first day of the month following the date the deceased employee would have attained age fifty-five (55) or the deceased employee's Determination Date. The Applicable Interest Rate shall be used to determine present value, including, when the assumed benefit commencement date is later than the Determination Date, discounting the present value determined as of the assumed commencement date to the Determination Date. Payment of the optional lump sum amount shall be completed as soon as practicable on or after the date as of which the amount is determined. 7. Other Terminations of Employment. If employment terminates before the employee is vested in Pension Restoration Benefits, or if employment terminates due to the death of the employee and the employee does not have a surviving Spouse, no benefits are payable hereunder. 8. Effect of Change of Control Event. (a) If a Change of Control Event is determined by the Committee to have occurred while an employee is actively employed by the Employer, the Committee may, in its sole discretion, establish an irrevocable grantor trust, to be entered into by the Employer and the trustee thereof, for the purpose of holding assets sufficient to fund some or all of the liability or contingent liability of the Employer to pay benefits hereunder to the employee. Funding of such irrevocable grantor ("rabbi") trust shall be in the discretion of the Board of Directors of Harley-Davidson, Inc. (b) If a Change of Control Event is determined by the Committee to have occurred while the employee is no longer actively employed by the Employer and before any periodic payments being made hereunder on behalf of an employee are completed, the Employer shall cash out, in single lump sum payment amount, the present value of any remaining payments yet to be made to or on behalf of the employee. Present value in this situation shall be determined as of the first day of the month following the month in which the Change of Control Event occurred. Present value shall be based on the assumption that the recipient of the monthly payments being cashed out has the life expectancy assigned to a person of similar age under the Funded Plan's general mortality assumptions used for funding purposes. If payments on behalf of the employee have not yet commenced as of the date of this determination of present value, it shall be further assumed that payments would have commenced on the later of such date of determination of present value or the first day of the month following the fifty-fifth birthday of the employee. The Applicable Interest Rate shall be used to determine present value, including, when the assumed benefit commencement date is later than the date as of which present value is determined, discounting present value determined as of the payment commencement date to the date as of which it is being determined. 9. Administration of the Agreement. The Committee shall administer and interpret the Agreement, and supervise its operation. Interpretation of the Agreement by the Committee shall be final and binding upon the employee. 10. Unfunded Agreement. This Agreement is unfunded and is maintained by the Employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. Nothing contained in this Agreement and no action taken pursuant to its terms shall create or be construed to create a trust of any kind, or a fiduciary relationship between Employer and employee, or any other person. The right of the employee to receive benefits hereunder shall be an unsecured claim against the general assets of Employer and neither the employee nor any other person shall have any rights in or against any amounts which may be earmarked by Employer in order to implement this Agreement or any other specific assets of Employer. 11. Additional ERISA Provisions. The Committee is the named fiduciary. The Agreement is unfunded. Direct payment is the basis of payment of benefits under the Agreement. The Committee shall determine all claims in accordance with the claims procedure set forth in the Funded Plan. 12. Assignment. The right of an employee or any other person to the payment of benefits under this Agreement shall not be assigned, transferred, pledged or encumbered except to the extent provided in a qualified domestic relations order within the meaning of Article XII of the Funded Plan. 13. Effect on Retirement Plans. Any benefits accrued pursuant to this Agreement shall not be deemed compensation to employee for the purpose of computing benefits under any qualified retirement plan or other benefit plan, whether qualified or nonqualified, which may be maintained by an Employer. 14. Severability. If any of the provisions of the Agreement shall be held to be invalid, or shall be determined to be inconsistent with the purpose of the Agreement, the remainder of the Agreement shall not be affected thereby. 15. Binding upon Successors. This Agreement shall be binding upon and inure to the benefit of the Employer and its successors and assigns and the employee and the employee's heirs, executors, administrators, and legal representatives. 16. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Wisconsin to the extent not preempted by federal law. HARLEY-DAVIDSON PENSION BENEFIT RESTORATION PLAN OPTIONAL LUMP SUM PAYMENT ELECTION FORM If I make the election below, the present value of my benefits under this Plan (and of any benefits to which I may be entitled under the terms of a Supplemental Executive Retirement Plan Agreement) will be paid to me in a single lump sum cash payment as soon as practicable after my employment terminates. If I die with this election in effect, any preretirement surviving spouse benefit to which my surviving spouse is entitled will be paid to my spouse in a single lump sum cash payment as soon as practicable after my death. The rules for determining present value are described in detail in the Plan. This election, when made, can only be changed with the consent of the Retirement Plans Committee, which has full discretion to approve or deny my request to make a change. Under no circumstances am I permitted to request a change in this election later than the last day of the calendar year preceding the calendar year in which benefit payments are scheduled to begin to be paid to me. [_] I ELECT the Optional Lump Sum Payment Method (described above). [_] I DO NOT ELECT the Optional Lump Sum Payment Method (described above). Employee Date Receipt Acknowledged by Retirement Plans Committee EX-10.2 3 EXHIBIT 10.2 FORM OF RETIREMENT PLAN AGMT Exhibit 10.2 HARLEY-DAVIDSON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FOR ("EXECUTIVE") HARLEY-DAVIDSON, INC. a Wisconsin corporation, together with its subsidiaries and affiliates (collectively referred to herein as the "Employer"), hereby establishes this Supplemental Executive Retirement Plan (the "SERP") for the Executive effective as of the ____ day of _____________, 199__, as follows: 1. Purpose. The purpose of the SERP is to provide the Executive with retirement income benefits which are supplemental to entitlements under the Funded Plan, the Harley-Davidson Retirement Savings Plan, the Harley-Davidson Pension Benefit Restoration Plan, and the Employer's post- retirement medical benefits plan. 2. Definitions. The following terms have the following meanings unless the context clearly indicates otherwise: (a) "Applicable Interest Rate" means the product of one (1.0) minus the applicable maximum tax rate expressed as a decimal multiplied by the preretirement earnings assumption in effect for the Funded Plan at the Executive's Retirement Date, expressed as a decimal. The product shall then be rounded up to the nearest hundredth. The "applicable maximum tax rate" means the total of the maximum federal individual income tax, the maximum State of Wisconsin individual income tax, and the Hospital Insurance (Medicare) payroll tax, taking into account the deductibility of state income taxes for federal income tax purposes, to the extent permitted by law and tax rates as they are legally in effect at the relevant time. Any subsequent adjustments which may be made to tax rates or to the Funded Plan's earnings assumption having retroactive effect to such date shall be disregarded. (b) "Applicable Percentage" means thirty-five percent (35%) plus, for each full calendar month of employment completed by the Executive after age fifty-five (55), one thousand seven hundred eighty-six ten-thousandths percent (0.1786%), not to exceed a maximum of fifty percent (50%) at age sixty-two (62). (c) "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 of Directors of Harley-Davidson, Inc.; (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; (iv) at least two-thirds of the continuing directors who are disinterested persons in office immediately prior to any other action proposed to be taken by Harley-Davidson, Inc.'s stockholders or by the Board of Directors of Harley-Davidson, Inc. determine that such proposed action, if taken, would constitute a change of control of Harley-Davidson, Inc., and such action is taken. Continuing director means any person who either was a director of Harley-Davidson, Inc. on the Effective Date, or was designated before such person's initial election as a director as a "continuing director" by a majority of the continuing directors. (d) "Code" means the Internal Revenue Code of 1986, as it may be amended from time to time. (e) "Committee" means the Retirement Plans Committee appointed by the Board of Directors of Harley-Davidson, Inc., or, if such Committee is unable to fulfill its duties under the SERP, the Board of Directors of Harley-Davidson, Inc. (f) "Determination Date" means the first day of the month coincident with or immediately following the date on which an Executive, who has a valid optional lump sum payment election in effect, terminates employment with the Employer for any reason, other than death, after satisfying the vesting requirements of Section 3. (g) "Earnings" and "Final Average Earnings" have the meanings assigned to such terms by the Funded Plan except that each shall be determined for purposes of this SERP without regard to the limitations on pensionable earnings imposed by Code Section 401(a)(17) and increased by any amount which would be taxable compensation if such amount were not contributed as a pretax contribution to a nonqualified plan of deferred compensation maintained by an Employer. (h) "Effective Date" means the date first above written. (i) "Funded Plan" means the Retirement Annuity Plan for Salaried Employees of Harley-Davidson. (j) "Retirement Date" means the later of the first day of the month coincident with or immediately following the date on which the Executive has terminated employment with the Employer for any reason, other than death, after satisfying the vesting requirements of Section 3, or the date on which payments commence to be made by the Funded Plan to the Executive. (k) "SERP Benefit" means the monthly benefit payable in the form of a single life annuity for the life of the Executive equal to the Applicable Percentage multiplied by the Executive's Final Average Earnings as specially defined for purposes of this SERP, offset and reduced by the Executive's monthly benefit entitlement payable in the normal single life annuity form under (i) the Funded Plan and (ii) the Harley-Davidson Pension Benefit Restoration Plan. A SERP Benefit hereunder is payable only to an Executive who is living on the date payments are to commence to be paid to the Executive. For this purpose, normal form SERP Benefit payments are deemed to commence on the Executive's Retirement Date and any optional lump sum payment of benefits is deemed to commence on the Executive's Determination Date. "Annuity," for all purposes hereunder, means periodic payments of income and does not, under any circumstance, suggest or require that a contract from an insurance company will be obtained to provide such periodic payments. (l) "Spouse" means the surviving spouse of the Executive, as such term is defined in the Funded Plan. 3. Vesting. The Executive's entitlement to the SERP Benefit hereunder vests and becomes nonforfeitable, to the extent accrued, upon completion of fifteen (15) Years of Vesting Service and attainment of age fifty-five (55) before termination of employment for any reason, including death. For purposes of this SERP the term "Years of Vesting Service" has the meaning assigned to it by the Funded Plan. 4. Coordination of SERP Benefits with Pension Benefit Restoration Plan. The SERP Benefit hereunder and any benefit entitlements of the Executive under the Harley-Davidson Pension Benefit Restoration Plan shall be coordinated by the Employer so as to have the effect of being benefits provided by a single plan or program. As a result, the same form of benefit payment is required for benefits under each program and the benefits payable under each program may be combined into one payment or check. Any election of the form of benefit payment made by the Executive under the Pension Benefit Restoration Plan shall be fully effective for all purposes of this SERP. 5. SERP Benefit. (a) Amount. The amount of the Executive's SERP Benefit shall be determined in accordance with Section 2(k), above. (b) Form of Payment. Unless the Executive has elected the optional lump sum form of payment in accordance with this Section and Section 4, the Executive's SERP Benefit shall be paid in the same form of payment applicable to the payment of benefits to the Executive under the Funded Plan. If a periodic payment method other than a single life annuity form of payment is in effect under the Funded Plan, the Executive's single life annuity payment hereunder shall be converted to the actuarial equivalent of such benefit on the basis of the Funded Plan's method of determining actuarial equivalency. (c) Commencement of Payment. Unless the Executive has elected the optional lump sum form of payment in accordance with this Section and Section 4, payment of the Executive's SERP Benefit shall commence at the same time as payments commence to the Executive under the Funded Plan. (d) Optional Lump Sum Payment. Subject to the requirements of Section 4, the Executive may, in accordance with Committee rules and procedures, elect to receive payment of the Executive's SERP Benefit in the form of a single lump sum cash payment amount. Special rules apply to the optional lump sum form of payment with regard to determination of the amount of the payment and when the payment is to be made. i) The amount of the Executive's optional lump sum cash payment shall be equal to the present value of the Executive's SERP Benefit determined as of the Executive's Determination Date. The present value determination shall be made on the assumption that two hundred forty (240) consecutive monthly SERP Benefit payments in the form of a single life annuity would otherwise have been made to the Executive, commencing on the Executive's Determination Date. The Applicable Interest Rate shall be used to determine present value. ii) Any lump sum cash payment to be made hereunder shall be made as soon as practicable on or after the Executive's Determination Date. (e) Optional Lump Sum Payment Election Procedures. Committee rules and procedures governing the election of the optional lump sum form of payment, and revocations of such election, include, but are not limited to, the following: The Executive may change the form of payment initially effective upon execution of this SERP only with the written consent of the Committee. Changes in such election may be made no later than the close of the calendar year preceding the calendar year in which benefit payments are to commence. The Committee has full and complete discretion regarding whether or not to consent to any change in payment method requested by an Executive. (f) Small Payment Cash Out Rule. Notwithstanding the foregoing provisions of this Section 5, the Committee is authorized to cash out the present value of benefits, using the methodology described in subparagraph (d), above, where the monthly payments which would otherwise be required to be made are de minimis, as determined by the Committee. 6. Preretirement Surviving Spouse Benefit. (a) Amount and Normal Form. If a vested Executive dies before the Executive's Retirement Date, or, if the Executive has a valid optional lump sum payment election in force, the Executive dies before the Executive's Determination Date, and the Executive has a Spouse who is eligible to receive a preretirement surviving spouse benefit under the Funded Plan, such Spouse shall be entitled to receive a preretirement surviving spouse benefit hereunder. The normal form of payment of the preretirement surviving spouse benefit is monthly payments for the life of the surviving Spouse, equal in amount to the Spouse's monthly preretirement surviving spouse benefit, determined using the Funded Plan methodology for determining preretirement surviving spouse benefits based on the deceased Executive's accrued benefits under the SERP immediately prior to death. (b) Commencement of Normal Form of Preretirement Surviving Spouse Benefit. Payment of the normal form of preretirement surviving spouse benefit hereunder shall commence at the same time as the similar benefit to the surviving Spouse commences under the Funded Plan. (c) Optional Lump Sum Payment. If the Executive has in effect at the time of the Executive's death a valid election to receive the Executive's SERP Benefit in the optional lump sum payment form, any preretirement surviving spouse benefit which is otherwise payable under this SERP shall be paid to the Executive's surviving Spouse in the form of a single lump sum cash amount. The single lump sum cash amount shall be equal to the present value of the monthly benefits described in subparagraph (a), above, determined on the assumption that two hundred forty (240) consecutive monthly benefit payments would otherwise be made, commencing on the first day of the month following the Executive's date of death. The Applicable Interest Rate shall be used to determine present value. Payment of the optional lump sum amount shall be completed as soon as practicable on or after the date as of which the amount is determined. 7. Other Terminations of Employment. If employment terminates before the Executive is vested in SERP Benefits, or if employment terminates due to the death of the Executive and the Executive does not have a surviving Spouse, no benefits are payable hereunder. 8. Effect of Change of Control Event. (a) If a Change of Control Event is determined by the Committee to have occurred while the Executive is actively employed by the Employer, the Committee may, in its sole discretion, establish an irrevocable grantor trust, to be entered into by the Employer and the trustee thereof, for the purpose of holding assets sufficient to fund some or all of the liability or contingent liability of the Employer to pay benefits hereunder to the Executive. Funding of such irrevocable grantor ("rabbi") trust shall be in the discretion of the Board of Directors of Harley- Davidson, Inc. (b) If a Change of Control Event is determined by the Committee to have occurred while the Executive is no longer actively employed by the Employer, but before any periodic payments to which the Executive is entitled hereunder have been completed, the Employer shall cash out, in single lump sum payment amount, the present value of any remaining payments yet to be made to or on behalf of the Executive. Present value in this situation shall be determined as of the first day of the month following the month in which the Change of Control Event is determined to have occurred and shall be based on the assumption that the recipient of the monthly payments has the life expectancy assigned to a person of the same age under the Funded Plan's general mortality assumptions used for funding purposes. The Applicable Interest Rate shall be used to determine present value. 9. Administration of the SERP. The Committee shall administer and interpret the SERP, and supervise its operation. Interpretation of the SERP by the Committee shall be final and binding upon the Executive. 10. Unfunded SERP. This SERP is unfunded and is maintained by the Employer primarily for the purpose of providing deferred compensation for a select member of management who is also highly compensated. Nothing contained in this SERP and no action taken pursuant to its terms shall create or be construed to create a fiduciary relationship between Employer and Executive, or any other person. The right of the Executive to receive benefits hereunder shall be an unsecured claim against the general assets of Employer and neither the Executive nor any other person shall have any rights in or against any amounts which may be earmarked by Employer in order to implement this SERP, or any other specific assets of Employer. 11. Additional ERISA Provisions. The Committee is the named fiduciary. The SERP is unfunded. Direct payment is the basis of payment of benefits under the SERP. The Committee shall determine all claims in accordance with the claims procedure set forth in the Funded Plan. 12. Assignment. The right of the Executive or any other person to the payment of benefits under this SERP shall not be assigned, transferred, pledged or encumbered. 13. Effect on Retirement Plans. Any benefits accrued hereunder shall not be deemed compensation to Executive for the purpose of computing benefits under any qualified retirement plan or other benefit plan, whether qualified or nonqualified, which may be maintained by an Employer. 14. Severability. If any of the provisions of this SERP shall be held to be invalid, or shall be determined to be inconsistent with the purpose of this SERP, the remainder of the agreement shall not be affected thereby. 15. Binding upon Successors. This SERP shall be binding upon and inure to the benefit of the Employer and its successors and assigns and the Executive and the Executive's heirs, executors, administrators, and legal representatives. 16. Governing Law. This SERP shall be construed in accordance with and governed by the laws of the State of Wisconsin to the extent not preempted by federal law. HARLEY-DAVIDSON, INC. BY Executive EX-27.1 4 EXHIBIT 27.1 FINANCIAL DATA SCHEDULE FOR 1996
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF HARLEY-DAVIDSON, INC. AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 39,577 0 159,350 1,564 85,758 347,082 554,551 261,281 1,062,915 217,965 0 778 0 0 532,789 1,062,915 371,051 371,051 255,274 255,274 1,249 0 405 52,371 19,377 32,994 0 0 0 32,994 .44 .44
EX-27 5 EXHIBIT 27.2 RESTATED FDS FOR 1995
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RESTATED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF HARLEY-DAVIDSON, INC. AS OF AND FOR THE THREE MONTHS ENDED MARCH 26, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-26-1995 19,295 0 146,140 1,844 101,957 344,932 440,818 221,630 683,837 176,322 0 772 0 0 415,531 683,837 294,886 294,886 204,495 204,495 1,963 0 (339) 37,633 13,818 23,815 (184) 0 0 23,631 .31 .31
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