Harley Davidson board member "abruptly" resigns

[Biketographer]

April 5th, 2025
To the Harley-Davidson Board of Directors:
Serving as a Board member for Harley-Davidson, Inc. (the "Company") has been an honor.
Harley-Davidson is the rare company with a meaning that stretches beyond its immediate
stakeholders, and I have been privileged to be a custodian of this iconic American brand and
manufacturer.

As a Board member, I have gone to great lengths to work constructively with the Board and to
give management adequate space and support to run the Company. Although I was not involved
in the appointment of Jochen Zeitz as CEO, as this pre-dated my time on the Board, I was initially
encouraged by his track record of successful brand-building at PUMA, and I supported many
aspects of what I felt he was trying to achieve at Harley.

Ultimately, however, it is the role of the Board to provide oversight and enforce accountability. To
that end, I wrote a letter to you on Monday, April 1, 2025, with form and content similar to this
letter's. I expressed grave concerns about the current state of the Company and recommended
specific actions, principally the immediate resignations of Chairman and CEO Jochen Zeitz, Lead
Independent Director ("Presiding Director") Tom Linebarger, and long-tenured Board member
Sara Levinson.

Unfortunately, thus far we have not made any meaningful progress, which I believe is necessary
in order to set the Company on a renewed path to restore trust with key stakeholders and ultimately
unlock the Company's full potential. Therefore, I hereby tender my resignation from the Board of
Directors of Harley-Davidson.

This letter serves to outline the reasons for my resignation.
The shareholder returns of the Company under current leadership show severe underperformance:

[Biketographer]

MILWAUKEE, April 29, 2025 /PRNewswire/ -- Harley-Davidson, Inc. (the "Company" or "Harley-Davidson") (NYSE: HOG) has released two presentations detailing Harley-Davidson's execution of its strategic plan as well as its fit-for-purpose Board of Directors' strong governance and effective oversight. The presentations expose the misleading campaign being run by H Partners, which Harley-Davidson believes is destructive to the interests of all shareholders.

As Harley-Davidson shareholders submit their votes for the May 14, 2025 Annual Meeting, these are the critical facts to consider:

Harley-Davidson's Board is acting in the best interests of all shareholders by:

    Overseeing management's execution of an ambitious strategic plan that is building on Harley-Davidson's legacy and that we believe is transforming the business in the face of an extremely challenging operating environment (especially for discretionary products in the leisure/powersports sectors) and delivering value for all stakeholders well above the Company's peers.

    Leading a rigorous and comprehensive CEO search process, as well as ongoing Board refreshment efforts, that demonstrate strong governance practices.

H Partners is taking the opposite approach. Despite having had every opportunity to address issues that were important to them during their three years on the Harley-Davidson Board – during which time they fully supported the Company's leadership and strategy and always voted with the Board on decisions1 – H Partners has decided to:

    Abruptly launch a disruptive campaign that we believe profoundly disregards good corporate governance, offers no constructive solutions that will benefit Harley-Davidson or its shareholders, and is in our view designed to enable H Partners to appoint unelected and unnamed Directors – including an H Partners representative after their representative just resigned from the Board – depriving shareholders of their right to choose their own representatives.

    Spread misleading claims regarding everything from appropriate peer groups, to Harley-Davidson's CEO's performance, to their own track record of support for the Company's strategy and for Directors while on the Board.

The Company urges shareholders to protect their investment by voting "FOR ALL" of Harley-Davidson's highly qualified Directors, and visit www.VoteHarleyDavidson.com to view the presentations, which detail the following key points:

Harley-Davidson's rigorous and comprehensive CEO search process, as well as its ongoing Board refreshment efforts, reflect good governance

    In September 2024, after Mr. Zeitz expressed interest in retiring in 2025, the Board asked Mr. Zeitz to provide an update on his interest in pursuing retirement at the December Board meeting. Shortly after the September 2024 Board meeting, the Board commenced a CEO search process by hiring a CEO succession expert. In December 2024, after Mr. Zeitz reaffirmed his interest in retiring, the Board began engaging with an executive search firm and formed a CEO search committee comprised of four Board members, including H Partners executive Jared Dourdeville.

    Despite the CEO Search Committee's process not being complete, the Board accommodated H Partners' demand to make a decision on H Partners' preferred CEO candidate before a deadline imposed by the candidate as the candidate supposedly had other job offers. The Board took extraordinary measures to accommodate H Partners, accelerating the Board's interviews of select top candidates. After careful evaluation by the independent Directors, H Partners' candidate failed to earn majority Board support as the Board determined the candidate lacked the skills and qualities needed to uphold Harley-Davidson's rich heritage and drive value for all stakeholders.

        Despite the threat of other job offers for H Partners' preferred CEO candidate as a reason to accelerate the Board's decision deadline, H Partners now asserts that their candidate remains available. And yet, H Partners refuses to reveal their candidate's identity while they simultaneously revealed the confidential identity of one of the Company's other CEO candidates.

    The gold standard and typical outcome of a CEO search process is unanimous support from the Board. Harley-Davidson shareholders should not have to settle for a CEO candidate who fails to receive even bare majority support.

    Harley-Davidson's Board also engages in a robust and thoughtful self-evaluation and refreshment process, which we believe ensures the Board and each Committee operate effectively and hold management accountable.

        The Board regularly conducts anonymous evaluations of Directors' contributions, performance and collective skills – a process in which Mr. Dourdeville was a consistent participant. In the Fall 2024 process, all Directors participated and no Director expressed concern with the current composition or performance of the Board.

        The Nominating and Corporate Governance Committee has a robust framework and process for identifying, vetting and interviewing Director candidates, which has resulted in one-third of the Board joining in the last four years, including the addition of two highly qualified Directors with excellent experience as sitting CEOs at publicly traded companies (assuming the election of Lori Flees at the upcoming annual meeting).

    H Partners' campaign seeks shareholder support for unnamed Directors (including an H Partners representative after their representative just resigned from the Board) and an unnamed CEO candidate, none of whom will be voted on by the shareholders – demonstrating what we believe is a blatant disregard for good governance principles and the right of shareholders to choose their own representatives.

The Board is overseeing the execution of Harley-Davidson's Hardwire strategic plan, which is delivering strong performance relative to industry peers, amid very challenging and volatile macroeconomic conditions

    Despite operating in one of the most challenging operating environments in the Company's 120+ year history, Harley-Davidson has outperformed its peers2, evidenced by:
        Operating margins of 13% (2022-2024), ~4 percentage points above the peer median3.
        Free cash flow ("FCF") as a percent of EBITDA of 70% (2022-2024), which is over twice the peer median4.
        Relative total shareholder return ("TSR") of ~10 percentage points higher than its peer median during CEO Jochen Zeitz's tenure[5].
    The Company's operating discipline, robust cash flow generation, and long-term earnings power have allowed it to:
        Reduce share count by 25% over the last three years, the most among Harley-Davidson's peers6.
        Increase annualized dividend per share by 14%, from $0.63 (first quarter 2022) to $0.72 (current).
        Return over $1.4 billion of capital to shareholders7 via share repurchases and dividends since 2022, representing 78% of Harley-Davidson's FCF8.

H Partners has demonstrated their profound disinterest in good governance, good-faith collaboration and an orderly CEO transition, and we believe their misguided and disruptive campaign offers no constructive solutions and is destructive to the interests of all shareholders

    H Partners had a voice inside the Harley-Davidson Boardroom for the past three years, with Mr. Dourdeville serving as their Director representative. They had sufficient opportunities to share their thoughts with fellow Directors and management through many interactions.

    For the entirety of those three years, until recently, Mr. Dourdeville and H Partners representatives, including Rehan Jaffer, supported Mr. Zeitz as CEO and even asked for him to commit to at least two more years in the role, endorsed the Hardwire strategic plan and management's execution of it, voted in favor of all current Directors standing for reelection and actively participated in the CEO search process – all without objection.

    Within a matter of days – just after H Partners' didn't get their way when their preferred CEO candidate failed to earn majority Board support – Mr. Dourdeville demanded that one-third of the Board resign, and he himself abruptly resigned from the Board right before a Board meeting to discuss his perspectives.

    H Partners suddenly discovered "deep misgivings" requiring "radical action" at Harley-Davidson, disclosed Board confidential information and resorted to a misleading campaign that jeopardizes the strategic and executional progress made to date. Further, we believe H Partners' campaign is undermining the Board's ability to attract the best CEO and future Director candidates, disenfranchising shareholders, and impeding management's ability to execute on key initiatives.

    Harley-Davidson has already addressed H Partners' requests – it accelerated the review of H Partners' preferred CEO candidate, and it has conducted and remains committed to ongoing Board refreshment. Beyond that, H Partners' campaign offers no constructive solutions that will benefit Harley-Davidson or its shareholders and seems to us solely focused on disingenuously attacking Company performance and the Board. H Partners' campaign is not about "accountability" – we believe it puts at risk the progress Harley-Davidson has made and the value of shareholders' investments.

    At its core, this campaign by H Partners is a further attempt, far outside the guardrails of good corporate governance, to engineer the CEO outcome they desire, targeting two independent Directors with the institutional knowledge that is critical in choosing the strongest CEO candidate to lead Harley-Davidson, as well as the retiring CEO, who is fully committed to doing what is necessary to support a successful transition.

H Partners' campaign has issued materials that lay bare their ignorance around Harley-Davidson's business and strategy and in our view contain numerous inaccuracies, hypocrisies and misleading assertions

The facts around just a few of these falsities and misrepresentations include:

    H Partners uses a reference benchmark comprised of companies that have little relevance to Harley-Davidson. Companies in this benchmark selected by H Partners are egregiously different from Harley-Davidson in size, core product offering, and scale – a disingenuous framework for comparison by a shareholder who claims deep understanding of Harley-Davidson, much less a shareholder who sat on the Board Committee that determined executive compensation and selected a peer group used in compensation awards.

        The legitimacy of Harley-Davidson's true core peer group – leisure and powersports peers between $800MM and $3B market cap – is reinforced and validated via overlapping independent analyst coverage. This is the same core peer group that Harley-Davidson used for 2024-2026 performance share awards as part of the Company's executive compensation plan – and a peer group that H Partners approved through Mr. Dourdeville, who sat on the relevant Board Committee when this peer group was voted on.

    Mr. Dourdeville and H Partners consistently supported Harley-Davidson's executive compensation program. Moreover, they were the driving force behind the implementation of the Aspirational Incentive Plan ("AIP"), a component of the compensation program.

    There has been minimal turnover of the executive leadership team with most being in-post since the Hardwire strategic plan was initiated. Three of the individuals cited by H Partners were not part of the executive leadership team. Further, employee turnover declined under Mr. Zeitz's leadership, with salaried voluntary turnover in 2024 being the lowest in Harley-Davidson's recorded history, and 2023 being the second lowest. Turnover in both years also fell below the national average.

    There was no personal promise ever made by the Board's Presiding Director, Tom Linebarger, to delay the CEO search process, nor was there any delay whatsoever – the search process commenced shortly after Mr. Zeitz expressed his interest in retiring with the hiring of a CEO succession expert.

We do not believe H Partners is a credible or trustworthy steward of shareholder value, and their disingenuous actions fly in the face of good corporate governance. For these reasons, the Board of Directors strongly urges shareholders to vote "FOR ALL" Harley-Davidson Director nominees on the WHITE proxy card and please DISCARD any BLUE proxy card received from H Partners.

The presentations are available on the Resources section of www.VoteHarleyDavidson.com.

[Biketographer]

CANTON, Ga., April 29, 2025 /PRNewswire/ -- Purple Chip Capital Management, LLC ("Purple Chip Capital"), a value-oriented investment manager and long-term shareholder of Harley Davidson, Inc. (NYSE:HOG) ("Harley Davidson" or the "Company"), today issued the following statement supporting H Partners' campaign for change at Harley-Davidson and announcing its intent to WITHHOLD its votes on the election of CEO and Chairman Jochen Zeitz, and Directors Thomas Linebarger and Sara Levinson at the Company's 2025 Annual Meeting of Shareholders.

"As long-term Harley Davidson shareholders and customers, we have watched in dismay as the Company has drastically strayed from the core tenets that made it a true and lasting American icon. Being a Harley Davidson owner has always been so much more than simply owning a bike. It has meant becoming a part of the distinctive culture and community that is so widely recognized across the United States. A community that was built upon a national network of dealerships that have served as hubs, delivering location-specific service, exclusive events and highly customized optionality around the bikes and products that Harley Davidson is known for.

Under the current Board of Directors, that culture has been neglected, weakening the engine that has motored Harley Davidson forward for nearly 125 years in favor of online sales, egregiously off-brand product lines and a departure from the high-quality optionality that made each and every Harley Davidson bike truly unique. Harley Davidson deserves a board of directors that recognizes what makes the Company special and that treats their dealers like the partners, customers and value-drivers that they are. Without financially successful dealerships, the community we are all proud to be a part of will fade and performance will continue to suffer.

On the product front, the Company must acknowledge that the electric Livewire line of bikes was horribly misguided and should be discontinued. Harley Davison owners do not want an electric engine, they desire raw American power. Instead, the Company needs to refocus its efforts on attracting the next generation of Harley riders, revamping the lineup, and bringing back the iconic Sportster 883 as an entry level motorcycle. Furthermore, an ongoing focus on cost reduction through the introduction of plastic accessories, trim, and customization has drastically reduced the appeal of the full Harley Davidson line of products. It is time to reignite the pride that Harley Davidson riders have always had in their bikes and the Company, and to bring back the highest-quality parts and accessories made with chrome, steel and leather.

We were thrilled to see H Partners voice the same concerns we have regarding the road Harley Davidson is currently embarking on, and we intend to WITHHOLD our votes for Directors Zeitz, Linebarger and Levinson at the Annual Meeting. We believe unseating those three long-tenured directors, who are clearly disconnected with what Harley Davidson has built its legacy on, would serve as a baseline step towards returning the Company to glory for the benefit of its riders, dealers and stockholders."

About Purple Chip Capital
Purple Chip Capital Management is an investment management company founded and run by Jason T. Dickerson and known for its value-oriented investment strategy and long-term approach to investing. Based in Canton, Georgia, Purple Chip Capital focuses on identifying undervalued companies, typically with a concentrated portfolio strategy, and if needed, actively engages with management to improve performance.