Harley Davidson 2012 Annual Report Download - page 113

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The material features of the union employees’ stock option awards are the same as those of the management employees’
stock option awards. Under the Company’s management and union plans, stock options have an exercise price equal to the fair
market value of the underlying stock at the date of grant and expire ten years from the date of grant. Beginning with awards
granted in 2010, stock options vest ratably over a three-year period with the first one-third of the grant becoming exercisable
one year after the date of grant. Awards granted prior to 2010 generally vested ratably over a four-year period, with the first 25
percent becoming exercisable one year after the date of grant.
The Director Compensation Policy provides non-employee Directors with compensation that includes an annual retainer
as well as a grant of share units. The payment of share units is deferred until a director ceases to serve as a director and the
share units are payable at that time in actual shares of Common Stock. The Director Compensation Policy also provides that a
non-employee Director may elect to receive 50% or 100% of the annual retainer 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 of shareholders. Each
Director must receive a minimum of one-half of his or her annual retainer in Common Stock until the Director reaches the
Director stock ownership guidelines defined below.
In August 2002, the Board approved “Director and Senior Executive Stock Ownership Guidelines” (Ownership
Guidelines) which were most recently revised in September 2012. The Ownership Guidelines stipulate that all Directors hold
15,000 shares of Common Stock and senior executives hold from 15,000 to 200,000 shares of the Common Stock depending on
their level. The Directors and senior executives have five years from the date they are elected a Director or promoted to a senior
executive to accumulate the appropriate number of shares of the Common Stock. Restricted stock, restricted stock units, shares
held in 401(k) accounts, vested unexercised stock options and stock appreciation rights, and shares of common stock held
directly count toward satisfying the guidelines.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information to be included in the Proxy Statement under the caption “Certain Transactions” and “Corporate
Governance Principles and Board Matters – Independence of Directors” is incorporated by reference herein.
Item 14. Principal Accounting Fees and Services
The information to be included in the Proxy Statement under the caption “Ratification of Selection of Independent
Registered Public Accounting Firm – Fees Paid to Ernst & Young LLP” is incorporated by reference herein.