your hma retirement benefits -...

Your HMA

BenefitsRetirement

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Retirement Program Summary Plan Description

Table of Contents

Your HMA Retirement Program

Your Pension Plan

Eligibility and Participation

Vesting

Determining Your Benefit

When Payments Begin

How Your Benefit is Paid

If You Die Before You Retire

If You Become Disabled

If You Leave and Later Return to Work

How Taxes Affect Your Benefits

Other Important Plan Information You Should Know

Your 401(k) Savings Plan


Enrolling in the Plan

How the 401(k) Savings Plan Works

Investing Your Account

Accessing Your Account

Receiving Your Account When You Leave HMA

If You Die Before Receiving Your Account

About Taxes


Administrative Information

Plan Information

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Your HMA

BenefitsRetirement

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Your HMA

BenefitsRetirement

Your HMA Retirement ProgramNo matter where you are in your career, there is one aspect of retirement that all associates should focus on — planning for it. You’re never too young or too old to start planning for retirement. And it’s a responsibility HMA shares with you.

Our retirement program consists of the Honda Manufacturing of Alabama, LLCPension Plan and the 401(k) Savings Plan.• The Pension Plan is the foundation of your future retirement income and

provides you with a benefit based on your annual base earnings throughout your career with HMA.

• The 401(k) Savings Plan helps you build on that foundation by allowing you to save on a pre-tax basis while receiving matching contributions from HMA to help your savings grow even faster.

This summary plan description (SPD) provides detailed information about the PensionPlan and 401(k) Savings Plan. If you have questions about the plans after reading thisSPD, please contact the Human Resources Department.

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Your Pension PlanThe Pension Plan is a defined benefit plan that is the foundation of your future retirement income. The Pension Plan provides you with a competitive and securebenefit that grows each year based on your annual base earnings. Best of all, the plan is paid for completely by HMA — it costs you nothing.

Here are highlights of the Pension Plan:

Your Pension PlanThe Pension Plan is a defined benefit plan that is the foundation of your future retirement income. The Pension Plan provides you with a competitive and securebenefit that grows each year based on your annual base earnings. Best of all, the plan is paid for completely by HMA — it costs you nothing.

Here are highlights of the Pension Plan:


Eligibility You are eligible to participate in the Pension Plan if:• You are a full-time, regular associate of HMA, and• You have worked for HMA for at least one year.

You are not eligible for the plan if you are: • A self-employed person who provides services to HMA through an agreement

between HMA and you,• Employed by a company that provides temporary workers to HMA, • A student or temporary associate, • An associate of an affiliate company on assignment at HMA, or• A transfer from an affiliate participating in the affiliate’s Pension Plan.

When Participation Begins Your participation in the Pension Plan begins on the first day of the month on or after the date you complete one full year of service. When your participation begins,you earn credit for each year of service beginning with your date of hire.

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Highlights

Eligibility

Cost

When ParticipationBegins

How Your Benefit isCalculated

When You CanBegin ReceivingPayments

Receiving YourBenefit

Administered by

All full-time, regular HMA associates.

This benefit is paid for entirely by HMA.

First day of the month on or following one full yearof service with HMA.

You receive a benefit from the plan based on a percentage of your annual base earnings for eachyear you work at HMA.

You receive full benefits at your normal retirementdate (age 65 or age 62 with 20 or more years of service). You can also retire with a reduced benefit as early as age 55 with at least 10 years of service.

You can choose from a variety of different paymentoptions.

HMA Retirement Plan Committee

For example, if you are hired on August 5, 2005: • You complete one year of service on August 5, 2006, and plan participation begins

on September 1, 2006. • You earn credit for each year of service on your anniversary date, including your

first year of service from August 5, 2005 to August 5, 2006.

VestingVesting refers to your ownership of your Pension Plan benefit. Under the PensionPlan, you become 100% vested in your benefit once you complete five years of serviceor reach age 65, whichever happens first.

Determining Your BenefitEach year you participate in the Pension Plan, you earn part of your future retirement benefit. The benefit amount you earn each year is 2.5% of your base earnings for that year.

When you retire, the yearly benefit amounts you earned throughout your HMA careerare added together to determine your Pension Plan benefit.

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Your HMA

BenefitsRetirement

What is Service?

Service determines when your participation begins, if you have a vested right to a plan benefit and whether you qualify for early retirement. Service begins

on your date of hire (or rehire). For each 12 consecutive months you work for HMA, you earn one year of service.

Service includes approved leaves of absence, including qualified disability, temporary layoff and military leave (provided you return to activeemployment

within the time required by law after your honorable discharge). For informationon breaks in service, refer to pages 7 and 8 of this summary plan description.

What Are Annual Base Earnings?Annual base earnings means the amount earned at your base earnings rate for a

calendar year. It does not include overtime, shift premium, bonuses, expenseallowances, attendance pay or other special compensation. The IRS limits the

amount of base earnings that can be used to determine your Pension Plan benefitduring a calendar year. This limit ($210,000 in 2005) may change in future years.

2.5% x =Annual Base Earnings Annual Pension Amount

When Payments BeginAfter your HMA employment ends, you can begin receiving benefits from the plan asearly as the first day of the month after you qualify for normal or early retirement.

Retiring at Normal Retirement AgeNormal retirement is age 65, or age 62 with at least 20 years of service. The followingexample shows how your Pension Plan benefit is calculated at normal retirement.

Assume that at retirement you have 25 years of service and your career base earningsequal $1,000,000, or an average of $40,000 each year.

Here’s how your monthly benefit is calculated.

Retiring EarlyHMA also offers early retirement if you are age 55 and have at least 10 years of service. If you retire early, you receive a monthly benefit that is calculated the sameway as your normal retirement benefit, but is reduced to take into account the longerperiod of time for which you are expected to receive Pension Plan benefits.

The amount of the benefit reduction is based on your age and years of service withHMA at the time you retire, as shown in the following table:

So, if you retire early, here’s the percentage of your full Pension Plan benefit you’llreceive:

An ExampleLet’s assume you leave HMA at age 55 with 10 years of service and have earned a pension benefit of $1,500 per month payable at normal retirement (age 65). If youelect to begin pension benefit payments at:• Age 55, you’ll receive 60% of your benefit...or $900/month.• Age 60, you’ll receive 80% of your benefit...or $1,200/month.• Age 64, you’ll receive 96% of your benefit...or $1,440/month.

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2.5%x =$1,000,000

in career base earnings($40,000/year x 25 years)

$25,000annual pension benefit

12 months÷ = $2,083monthly pension benefit

$25,000annual pension benefit

Early Retirement Pension Benefits by Retirement Age55

10 – 19 years of Service

20 + yearsof Service

60%

72%

56

64%

76%

57

68%

80%

58

72%

84%

59

76%

88%

60

80%

92%

61

84%

96%

62

88%

100%

63

92%

100%

64

96%

100%

65

100%

100%

Years of Service Reduction Factor for EachYear of Early Retirement

Early Retirement Age

10 - 19 years

20 + years

4%

4%

55 - 64

55 - 61

How Your Benefit Is Paid When you retire, you can choose to receive your benefit in a variety of ways, depending on your marital status:• If you are single, your benefit will be paid as a life annuity, unless you elect

otherwise. • If you are married, your benefit will be paid as a 50% joint and survivor annuity

with your spouse as the beneficiary, unless you elect otherwise with your spouse’s consent.

The Pension Plan offers the following payment options for your benefit.

Life Annuity A life annuity provides a monthly payment to you for your lifetime only. Benefitsstop at your death with no survivor benefits payable. This payment form gives youthe highest monthly payment amount.

Joint and Survivor Annuity (50% or 100%) This payment option provides a reduced monthly benefit for your lifetime. After yourdeath, a percentage of your benefit — 50% or 100%, based on your election — is paidto your surviving spouse for his/her life.

Your benefit is reduced to pay for the cost of continuing benefits to your spouse. Thereduction amount is based on the ages of you and your spouse on the date benefitsbegin. In addition, if you elect to continue 100% of your benefit (instead of 50%) toyour spouse, your benefit reduction will be greater.

Certain Period Option (5 or 10 Years) This payment option provides reduced monthly benefits for your lifetime and guarantees to make payments for a certain period — 5 or 10 years, based on your election. This means that if you die before the end of the certain period, paymentswill continue to your beneficiary for the remainder of the period. If you die after thecertain period, no further benefits are paid.

The reduction in your monthly benefit pays for the guarantee to make payments forthe certain period. The longer the certain period, the greater your benefit is reduced.

If the Present Value of Your Benefit is Less than $5,000If you leave HMA, are vested, and the present value of your benefit is less than $5,000 but more than $1,000, you may choose to receive your benefit as a lump sum payment. If the vested value of your benefit is less than $1,000, you will automatically receive it as a lump sum.

If you receive your benefit as a lump sum, you will be given the option to roll overthe lump sum to an eligible retirement plan.

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Your HMA

BenefitsRetirement

If You Are Married

If you are married, your spouse must agree in writing to your elected payment form if you:• Elect a payment form other than a joint and survivor annuity and/or• Name a person other than your spouse as beneficiary.

The agreement must include your spouse’s notarized signature and be filed within 90 days of the start of benefit payments.

Rollovers

The Pension Plan does not accept rollovers from other pension and/or savings plans.

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If You Die Before You Retire If you are vested in the plan — you have five or more years of service or are over age65 — the plan provides a benefit in the event of your death before benefit paymentsbegin. This applies even if you are not employed by HMA at the time of your death.

The benefit is determined as if you retired the day before you died and elected a 50%joint and survivor annuity. Lifetime payments are made to your spouse, if you aremarried; otherwise, payments are made to your beneficiary. A non-spouse beneficiarymay elect to receive death benefits in the form of installments for up to 20 years. Yourspouse or beneficiary may elect a lump sum payment of this benefit instead ofmonthly payments. If you are unmarried and have not named a beneficiary, paymentis made to your estate over a period of five years or less.

If you are married and under age 35, government regulations require you to nameyour spouse as your primary beneficiary. You can name a beneficiary other than yourspouse beginning the earlier of the first day of the plan year you reach age 35 and thedate your HMA employment ends. However, you must have your spouse’s written,notarized consent for this election.

If You Become Disabled If you are unable to work due to a qualified disability, you continue to earn: • Service and• Benefit amounts for each year you have a qualified disability, using your annual

base earnings at the time you became disabled.

You will continue to earn service and benefit credits until the earlier of the date: • You are no longer eligible to receive payments under HMA’s long-term disability

plan or Social Security disability payments or• You begin receiving pension benefits or die.

You may elect to begin benefit payments any time after you qualify for early retirement; however, your Pension Plan benefit will reduce your HMA long-term disability benefit.

If You Leave and Later Return to Work If you leave HMA with five or more years of service, you are vested and eligible for the Pension Plan benefit you had earned as of the date you left. The benefit is payablewhen you qualify for normal retirement. If you leave HMA with at least 10 years ofservice, you can begin payments as early as age 55, subject to early retirement reductions.You need to contact the Human Resources Department to begin benefit payments.

If you work for HMA until age 65, you are eligible for your Pension Plan benefitregardless of your years of service.

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Qualified Disability

A qualified disability means you are receiving or approved for both HMA’s long-term disability plan benefits and Social Security disability benefits for the same disability.

If You Were Not Vested When You Left If you were not vested when you left HMA, special rules apply. These rules are based on the length of your absence after a break in service.

A one-year break in service occurs if you do not work for HMA for 12 months afteryour HMA employment ends for any reason. Qualified disability, approved leaves ofabsence or temporary layoffs do not end your employment unless you fail to returnfrom the leave. For parental leaves of absence (due to birth or adoption of a child), the12-month period begins on the first anniversary of your absence.

If You Return to HMA in Less Than Five YearsIf you return to HMA in less than five years, your service and benefit amounts arerestored. For example, if you left HMA with two years of service and returned threeyears later, your two years of prior service and your annual benefit amounts for eachyear would be restored.

If You Return to HMA After Having Five or More One-Year Breaks in ServiceIf you return to HMA after having five or more one-year breaks in service, your serviceand benefit amounts are not restored and you will be treated as a new hire under theplan. For example, if you leave HMA with four years of service and return after sixyears, your four years of prior service and benefits are not restored, and you will beconsidered a new hire for plan purposes.

Rehired Retirees If you are receiving plan benefits and return to work at HMA, your benefit paymentswill stop when you are rehired. When you retire again, your benefit will be adjustedto account for payments already received (to avoid duplicating benefits) and new benefit amounts earned during your additional years of service.

How Taxes Affect Your BenefitsWhen you — or your beneficiaries — begin receiving your monthly Pension Plan benefit, no taxes are withheld from your pension payments unless you elect with-holding. However, your pension is taxable as ordinary income when you receive it.That means the payments you receive during the year will be part of your total taxable income for that year.

If your benefit is less than $5,000 and is paid out as a lump sum, it is taxable as ordinary income. You can defer paying taxes on a lump sum distribution that is rolledover or transferred directly to an individual retirement account (IRA) or another qualified plan that accepts rollovers. If you do not elect a direct transfer of the entirelump sum distribution, the Plan is required to withhold 20% of the taxable amountdistributed. You’ll receive a summary of current IRS rollover rules if you are eligible for a lump sum payment.

In addition, if you receive a distribution from the plan prior to age 55, you will pay a10% early distribution tax.

Since tax laws are complex, you may want to consult your personal tax advisor foradditional information.

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Your HMA

BenefitsRetirement

Don’t Forget about Social Security

Don’t forget that both you and HMA contribute equally to Social Security while you areworking. Social Security provides you and your family with retirement, disability, family, survivor, and Medicare benefits. You can contact Social Security at 1-800-772-1213 or by logging on to their website at www.ssa.gov.


Plan LimitsThe Pension Plan is subject to some additional limits set by law. You will be notified if any of these limits affect your benefit or your participation in the plan.

Compensation LimitsFederal law limits the amount that can be considered as compensation for plan purposes each year. For 2005, the compensation limit is $210,000. The IRS mayadjust this compensation limit each year to reflect changes in the cost of living.

Maximum BenefitsIn any given year, the total amount of benefits you may receive from qualified benefitplans, such as the Pension Plan, is also limited by law. These limits are defined by theIRS and normally affect only highly compensated associates. The maximum amountmay change each year.

You will be notified if these maximums apply to you. More information is availablefrom the Human Resources Department.

While You Are on Military LeaveIf you leave your job for active duty with one of the branches of the United States military, you may be entitled to reemployment rights under the Uniformed ServicesEmployment and Reemployment Rights Act of 1994 (USERRA). For purposes of thisplan, that means your period of military service is treated as service with HMA if youreturn to your job within the time limits set by law.

If you return to work after a period of qualified military service, annual company contributions and service credit for that period of qualified military service will be provided in accordance with Internal Revenue Code Section 414(u).

Funding of the PlanHMA periodically makes actuarially determined contributions to the plan to fund thebenefits earned by participants. Administrative expenses for trustee/custodian fees are paid by the plan. Other administrative fees (including expenses such as audit,legal, recordkeeping and consulting fees) may be paid by the plan as HMA deemsappropriate.

Future of the PlanHMA intends to continue the Pension Plan indefinitely. However, HMA reserves theright to amend, modify, suspend or terminate the plan at any time, for any reason.

If HMA terminates the plan for any reason, the assets in the plan will be used for the exclusive benefit of plan participants and their beneficiaries until all benefit obligations have been met. If the plan terminates, you become 100% vested in your benefit.

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Pension Benefit Guarantee CorporationYour pension benefits under this Plan are insured by the Pension Benefit GuarantyCorporation (PBGC), a federal insurance agency. If the Plan terminates withoutenough money to pay all benefits, the PBGC will step in to pay pension benefits.Most people receive all of the pension benefits they would have received under theirplan, but some people may lose certain benefits.

The PBGC guarantee generally covers:• Normal and early retirement benefits;• Disability benefits if you become disabled before the Plan terminates; and• Certain survivor’s benefits.

The PBGC guarantee generally does not cover:• Benefits greater than the maximum guaranteed amount set by law for the year in

which the Plan terminates;• Some or all of benefit increases and new benefits that are based on Plan provisions

that have been in place for less than five years at the time the Plan terminates;• Benefits that are not vested because you have not worked long enough for the

Corporation;• Benefits for which you have not met all of the requirements at the time the Plan

terminates;• Certain early retirement benefits (such as supplemental benefits that stop when

you become eligible for Social Security) if they result in early retirement monthly benefits that are greater than your monthly benefit at the Plan’s normal retirementage; and

• Nonpension benefits (such as health or life insurance, certain death benefits, vacation pay and severance pay).

Even if certain benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money your Plan has and on how much the PBGC collects from employers.

If you have questions about the PBGC or the benefits it guarantees, you may contactthe Plan Administrator, or you may contact the PBGC at:

PBGCTechnical Assistance Division1200 K Street, N.W. Suite 930Washington, D.C. 20005-4026 (202) 326-4000

TTY/TDD users may call the federal relay service toll free at 1-800-877-8339 and ask tobe connected to 1-202-326-4000. Additional information about the PBGC’s pensioninsurance program is available through the PBGC’s website at http://www.pbgc.gov.

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Your HMA

BenefitsRetirement

Your 401(k) Savings PlanPlanning for your retirement is important - whether retirement is right around thecorner or further down the road. With the HMA 401(k) Savings Plan, you have avaluable opportunity to save for your future financial needs while receiving significantmatching contributions to your account from HMA.

Here are highlights of the 401(k) Savings Plan:


Eligibility You are eligible to participate in the 401(k) Savings Plan if:• You are a regular associate of HMA working at least 16 hours per week and• You have worked for HMA for at least three months.

You are not eligible for the plan if you are: • A self-employed person who provides services to HMA through an agreement

between HMA and you,• Employed by a company that provides temporary workers to HMA, • A student or temporary associate, or • An associate of an affiliate company on assignment at HMA.

When Participation Begins You are automatically enrolled in the plan on the first day of the month after youmeet the eligibility requirements. For example, if you are hired on January 15, youwill have three full months of service on April 15 and will be enrolled in the planbeginning on May 1.

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Highlights

Eligibility

When ParticipationBegins

Your Savings

HMA’s MatchingContributions

Vesting

Special Plan Features

When You CanReceive Your Benefits

Administered by

All regular HMA associates working at least 16 hoursper week for a minimum of three months.

Automatically on the first day of month on or followingthree full months of HMA employment, unless youchoose not to participate.

You can save up to 20% of your annual base earningsthrough the plan (up to the annual IRS limit of$14,000 for 2005) on a pre-tax basis.

When you save through the plan, HMA contributes $1 for every $1 you save on your first 3% of annualbase earnings and $0.50 for every $1 you save on your next 2% of annual base earnings.

You are always 100% vested in your contributions,HMA’s matching contributions, and investment return.

• Easy, automatic enrollment.• You can withdraw funds while employed after

age 591/2 or if you have an approved financial hardship.

• You can borrow against your account.• You can roll over money from another qualified

plan into this plan.

When you leave HMA, retire, die or become disabled.

HMA Retirement Plan Committee

Enrolling in the Plan You do not need to enroll to participate in the plan. Once you are eligible, you automatically become a participant contributing 3% of your annual base earnings to your 401(k) Savings Plan account. You will then need to determine:• If you want to save more or less than the automatic 3% contribution through

the plan and• How you want to invest your account.

To make your investment decisions and/or change your contributions to the plan,you must contact Merrill Lynch by calling 1-888-426-4015 or logging on to their website at www.benefits.ml.com.

How the 401(k) Savings Plan Works The 401(k) Savings Plan is designed to help you save additional money for retirement.Here’s how the plan works.

Your Savings You can save from 1% to 20% of your annual base earnings through the 401(k)Savings Plan, up to the annual IRS limit ($14,000 for 2005). When you save throughthe plan, your savings are deducted from your paycheck before federal and most stateand local taxes are calculated. This lowers your taxable income, which means youpay less in current income taxes.

Special Catch-Up Contributions If You Are Age 50 or OlderWhile the maximum amount you can contribute to the plan in 2005 is $14,000,you may be able to contribute more if you are age 50 or older by the end of the year.If you are age 50 or older, you can contribute an additional amount to help you“catch up” on your retirement savings.

Here’s a look at how much you can save through the 401(k) Savings Plan over thenext three years:

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Your HMA

BenefitsRetirement

Base Earnings

Base earnings mean your current base earnings (or salary). It does not include overtime, shiftpremium, disability benefits, bonuses, expense allowances or other special compensation.

YearIf you are up to age 50, you

can save up to:If you are age 50 or

older (by end of year),you can save up to:

2005

2006

Subsequent years

$14,000

$15,000

Adjusted for cost of living increase in $500 increments

$18,000

$20,000

The Advantage of Before-Tax Contributions Saving through the plan with before-tax contributions lowers your taxable income,which increases your take-home pay. This example shows the difference between saving through the plan on a before-tax basis versus an after-tax basis.

Let’s say that Chris:• Earns $35,000 a year and• Saves 6% of his pay through the plan each year.

This example shows how contributing that money on a before-tax basis saves Chrismoney versus saving it on an after-tax basis.

As you can see, the same amount was saved. However, by saving with before-tax contributions, Chris’ taxable income is lower and take-home pay is increased by $315.

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Expense After-Tax Savings Before-Tax Savings

Chris’ annual pay

Before-tax contribution

Taxable income

Federal tax (15%)

After-tax savings

Take-home pay

Difference in take-home pay

Note: Only federal taxes were withheld in this example. Since state and local tax laws vary, you may be eligible for special tax treatment under those laws, too. Check with a tax advisor for specific information.

$35,000

N/A

$35,000

- $5,250

- $2,100

$27,650

$35,000

- $2,100

$32,900

- $4,935

N/A

$27,965

+$315/year

Rollover Contributions

If you received a distribution from an Individual Retirement Account (IRA) or a previousemployer’s qualified retirement plan, you may be allowed to roll that money into the HMA401(k) Savings Plan. For more information about rollovers, contact the Human ResourcesDepartment.

HMA Matching Contributions To encourage you to save, HMA matches $1 for every $1 that you save through theplan on the first 3% of your annual base earnings and $0.50 on each $1 you save onthe next 2% of your annual base earnings.

To help you understand how matching contributions work, let’s assume you earn$35,000 each year. The following chart shows how HMA’s matching contributionsvary based on how much you save:

Example of Increase in Savings It makes sense to consider saving in the HMA 401(k) Savings Plan. It can: • Increase your spendable income,• Increase your total savings with matching contributions from HMA, and• Increase the rate of growth of your savings because earnings are not taxed

until withdrawn.

The following chart compares how much you might accumulate over time if yousave $2,100 a year in a personal savings account versus the 401(k) Savings Plan.

Personal Savings – Assumes you contribute $2,100 a year and your account grows at an annual rate of 8%. HMA 401(k) Savings Plan – Assumes you earn $35,000 and contribute 5% of pay ($2,100) each year to the plan. By contributing 5% of pay, you receive the maximum HMA match of 3%, or $1,050 a year, for a total annual contribution of $3,150; and the investments grow at an annual rate of 8%.

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Your HMA

BenefitsRetirement

Reduction Factor for Each Year of Early Retirement

You Save

HMA Matches

Total Contributions

$1,750

$1,400

$3,150

5%

$1,050

$1,050

$2,100

3%

$700

$700

$1,400

2%To

tal A

cco

un

t V

alu

e

Years in the Plan

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$-5

$12,194

10 15 20 25

$56,436

$101,582 $95,114

$151,948

$21,948

$171,206

$273,506

$30,110$54,198

Vesting Vesting means your ownership of your 401(k) Savings Plan account. You are alwaysfully vested in your own savings, plus any investment return on your savings. You are also immediately 100% vested in all matching contributions HMA makes to your 401(k) Savings Plan account. This means that the value of your savings, HMA’smatching contributions and any investment return are yours when you leave HMA or retire, regardless of your years of service.

Investing Your Account The 401(k) Savings Plan currently offers ten investment funds to help you meet yourfuture retirement income goals. You choose how to invest your account in whole percents. For example, you can invest 72% in one fund and 28% in another. Or, ifyou choose, you can invest your account in any of three premixed GoalManagerModel Portfolios offered by Merrill Lynch. Your investment election is applied to both your contributions and HMA matching contributions.

Investment Funds The plan currently offers ten funds with a range of risk and return opportunities. • Risk is the chance that the value of your investment could decline. Risk is based

on factors such as interest rate changes, inflation and fluctuations in the stock market.

• Return is an investment’s profit or loss. This may include an increase or decrease in a fund’s value, interest, dividends or other income.

Generally, investors expect a higher return as the level of risk increases; however, thelevel of potential loss also increases.

For specific information about your investment fund options, refer to the fundprospectuses. Fund prospectuses are available by calling the Merrill Lynch ParticipantService Center information at 1-888-426-4015.

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Making Choices

As you consider your investment choices, keep in mind that: • The value of any fund can increase or decrease,• Past fund performance does not guarantee future performance, and • You need to decide on a mix of investments that’s right for you — HMA cannot advise

you on how to invest your savings.

Merrill Lynch GoalManager Service If you are unsure how to allocate your investments in the plan, the Merrill LynchGoalManager Service is a tool that can assist you in managing your long-term financial objectives with premixed GoalManager Model Portfolios.

GoalManager Model Portfolios provide consistent asset mixes and different risk/returnprofiles, depending on the type of investor you are: conservative, moderate or aggressive.

You can select the model portfolio with an asset mix that you believe may help you to achieve your investment goals. And to ensure the portfolios maintain their originalasset mix, the portfolios are rebalanced on a quarterly basis to address changes overtime, so you can be sure the portfolio stays in line with your financial goals and tolerance for risk.

Keeping Track of Your AccountOnce you’ve determined how much you want to save and how you want youraccount invested, you can watch your account work. To help you keep track of it,you’ll receive a statement each quarter that shows the activity in your 401(k) SavingsPlan account.

Your statement shows:• your opening and closing balances in each investment fund,• your savings (including any rollovers),• matching contributions from HMA,• investment earnings or losses,• any reallocations you made from one investment fund to another,• any loans or withdrawals you received, and• any loan payments made.

You may also call Merrill Lynch at 1-888-426-4015 or access your account online atwww.benefits.ml.com for current information about your account. You can accessyour account balance, change your investment fund elections, transfer balances fromone investment fund to another, and request a loan or withdrawal.

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Your HMA

BenefitsRetirement

Call Merrill Lynch Participant Service Center

For up-to-date information about your 401(k) Savings Plan account, you can call the MerrillLynch Participant Service Center (PCS) toll-free at 1-888-426-4015. Representatives are available to answer your questions Mondays through Fridays from 7 a.m. to 6 p.m. CentralTime on days the New York Stock Exchange is open.

Changing Your ElectionsBecause your financial goals can change over time, the 401(k) Savings Plan gives you the flexibility to change your savings and investment decisions. By calling 1-888-426-4015 or logging on to www.benefits.ml.com you can:• Reallocate your existing account balance. You may reallocate your current

account balance by transferring money from one investment option to another as often as you wish.

• Change your investment elections for future savings. You may change your investment elections for future savings at any time. There are no limits or restrictions on the number of changes you may make.

Accessing Your AccountThe HMA 401(k) Savings Plan is designed for long-term savings, but there may betimes when you need access to the money in your account. That’s why the planallows you to borrow or withdraw money from your account in certain situations.

Loans You can borrow against your plan account by requesting a loan. The minimum loanamount is $1,000. The maximum amount you may borrow is based on your balancein the plan and is the lesser of:• $50,000 (less your highest outstanding loan balance during the past 12

months) or• 50% of your 401(k) Savings Plan balance.

You may have only one outstanding loan at a time, and there is a one-year waitingperiod between paying off one loan and applying for another.

You repay the loan, with interest, by making payments to your account through payroll deduction. The repayment period can be from 12 to 60 months. The interestrate is determined as the prime rate plus 1%.

If you terminate your employment with HMA, the entire amount of the outstandingloan will become payable. If you do not repay the loan, the amount of the remainingbalance will be treated as a taxable distribution and may be subject to the 10% taxpenalty.

If you repay the loan before you terminate employment, you can roll over your entireaccount — including the repaid loan — to another qualified plan or IRA.

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To Apply for a Loan

To apply for a loan, call the Merrill Lynch Participant Service Center (see page 17) and speakto a representative. A $10 non-refundable loan fee is assessed against your account.

Withdrawals While Employed You may make withdrawals from the 401(k) Savings Plan while you are activelyemployed by HMA if: • You reach age 591/2 or • You have an approved financial hardship, as described in the following section.

Hardship Withdrawals If you have a financial hardship and other savings available to you have beenexhausted, you can make a limited hardship withdrawal from your plan account.

A hardship is defined as an immediate and heavy financial need required to: • Purchase your primary residence. • Pay unreimbursed medical expenses for you, your spouse or children incurred in

the last 12 months. • Pay college tuition and related room and board charges for the next 12 months

for you, your spouse or children. • Prevent eviction from or foreclosure on your primary residence.

The funds available for hardship withdrawals are limited to your before-tax contributions (excluding earnings) on your savings. From these funds, you may withdraw an amount that is at least $500 but does not exceed the amount needed to pay the hardship expense. Your withdrawal is subject to applicable income taxes.The IRS may also impose a 10% penalty tax on a withdrawal received before youreach age 591/2. See page 20 for more information.

If you take a hardship withdrawal, you are not allowed to participate in the 401(k)Savings Plan for at least 12 months. Before taking a hardship withdrawal, you mustattempt to satisfy the hardship by applying for a loan from the plan.

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Your HMA

BenefitsRetirement

Requesting a Hardship Withdrawal

If you have a financial hardship and need to make a withdrawal from your account, you can request a hardship withdrawal packet from the HMA Human Resources Department at1-205-355-5000. Complete a Hardship Withdrawal form and mail along with any requireddocuments to Merrill Lynch. Allow up to 7-10 days for processing a hardship withdrawal.

Receiving Your Account When You Leave HMA In general, the 401(k) Savings Plan is designed to pay benefits at retirement. However, you can receive your account balance when you leave HMA, retire, orbecome disabled. If you leave HMA before retirement, you can:• Elect to receive a lump sum,• Leave your account in the plan, or• Roll your account over into a new 401(k) plan, IRA, or another qualified

retirement plan.

Receive a Lump Sum PaymentYou can receive the total value of your account as a lump sum. The account value ispaid to you in one single cash payment. If the value of your account is less than$1,000 at the time your employment with HMA ends, you automatically receive thisform of payment.

Keep in mind that this payment option is considered a taxable distribution. For moreinformation, see page 20.

Leave Your Account in the PlanIf your account balance (excluding rollover contributions) is more than $1,000 whenyour employment ends, you can choose to leave your money in the plan. You are,however, legally required to take out a minimum amount beginning no later than the end of the year in which you reach age 701/2.

Roll Over Your Account Balance You can also roll over your HMA 401(k) Savings Plan account to another employer’squalified retirement plan or an Individual Retirement Account (IRA) if your balance ismore than $1,000 when your employment ends. • With a direct rollover, your account is transferred in one payment from the

401(k) Savings Plan to the eligible plan you specify. In this case, no federal tax is withheld, and you’ll continue deferring taxes on your account funds until you receive payment.

• With an indirect rollover, you receive a lump sum distribution of your account and then transfer the money on your own to the eligible plan. In this case, the following apply: – 20% federal income tax will automatically be withheld from your payment

(you’ll need to make up this amount to roll over the full distribution). – You must roll over the full amount (including the 20% withheld) within 60

days of receiving the payout to avoid additional taxes. – Any amount not rolled over within 60 days will be subject to income taxes

and possibly additional taxes.

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Requesting Payment of Your Account

For information about how to receive payment of your account, contact Merrill Lynch. In theevent of your death, your beneficiary should notify the HMA Human Resources Departmentat 1-205-355-5000.

If You Die Before Receiving Your AccountIf you die before receiving your account, the total value of your plan account ispayable to your beneficiary.

If you are married at the time of your death, your spouse will be the sole primary beneficiary. If your spouse provides written notarized consent, you can name a beneficiary other than your spouse.

Naming a Beneficiary When you are enrolled in the 401(K) Savings Plan, you name a beneficiary to receivethe value of your account if you die. • If you are married, the plan provides that initially your spouse is your sole,

primary beneficiary. To name a person other than your spouse as beneficiary, you must have your spouse’s written consent with a notarized signature as required by law.

• You may name more than one beneficiary and indicate the order and percentages for payment of your account with your spouse’s consent as described above. Without these instructions, the surviving beneficiaries will receive equal shares.

• You may change your beneficiary at any time by completing a new enrollment/change form. If you are married, changes are subject to spousal consent as described above. Forms are available from and should be returned to the HMA Human Resources Department.

About Taxes Your before-tax contributions, HMA matching contributions and all investmentreturns are not taxed while they are in the plan. As a result, money in your account istaxable when withdrawn.

There are two types of taxes that may apply to your account: ordinary income tax and a 10% penalty tax for early withdrawal. These taxes are outlined in the followingsections based on current tax law. Because taxes are complex and subject to change,you may want to consult a tax advisor about your situation.

Ordinary Income Tax Your account is subject to ordinary income tax (federal income, plus any state andlocal taxes) in the year you receive payment. If you receive a distribution in the formof a lump sum, 20% of your distribution will automatically be withheld from yourpayment to cover federal income tax. If your actual tax liability is less, you’ll receive a refund after you file your tax return. The 20% withholding does not apply toamounts you directly roll over to another eligible plan.

10% Additional Tax for Early WithdrawalThe 401(k) Savings Plan is designed for long-term savings. As a result, the IRS imposesa 10% additional tax on withdrawals and distributions you receive: • Before age 591/2 while actively employed by HMA or • If you terminate employment before age 55.

This tax is not applied in special situations regardless of your age. The 10% tax doesnot apply to payments: • Made due to your death or disability,• Rolled over to an IRA or other qualified plan, • Made to your spouse or dependent under a qualified domestic relations order, • Used for unreimbursed medical expenses (as defined by the IRS) which exceed

7.5% of your income, and • In certain other situations as provided by the IRS.

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Your HMA

BenefitsRetirement


Plan LimitsFederal tax laws impose certain limitations on the benefits and contributions underqualified savings plans. For example, the IRS limits:• Your before-tax contributions to the 401(k) Savings Plan and other individual

account plans. For 2005, this limit is $14,000 ($18,000 if you are age 50 or older during 2005).

• Total annual 401(k) Savings Plan contributions made by you and HMA (for 2005, this limit is $42,000 or 100% of pay, if less).

You will be notified if these maximums apply to you. More information is availablefrom the Human Resources Department.

Contributions and Loan Repayments While You Are on Military LeaveIf you leave your job for active duty with one of the branches of the United States military, you may be entitled to reemployment rights under the Uniformed ServicesEmployment and Reemployment Rights Act of 1994 (USERRA). For purposes of thisplan, that means your period of military service is treated as service with HMA if youreturn to your job within the time limits set by law.

If you return to work after a period of qualified military service, annual company contributions and service credit for that period of qualified military service will be provided in accordance with Internal Revenue Code Section 414(u).

In addition, if you meet the legal time requirements, before-tax contributions for your period of military service can be made up:• As if you had continued to work for HMA during your leave and• At the rate of pay you were receiving before your military service.

HMA will then match your make-up contributions as if they were regular before-taxcontributions to the plan.

These contributions will be in addition to any regular contributions you elect to makeafter your return to work. They will not be credited with investment earnings for theperiod of your absence.

You have up to three times the length of your military service to make up contributions to the plan after you return from service (but no more than five years).If you want to make up contributions following a return from military service, contactthe Human Resources Department.

Loan Repayments During Military ServiceYou also do not have to make payments on any loans from your account while youare away from work because of military leave. Your loan repayments will resume ifyou return to work during the time period protected by law. The loan maturity date is then adjusted to reflect your period of military service. The loan amount also will be adjusted to reflect interest that accrues on the loan during the military leave. Theinterest rate while you are on military leave will not exceed six percent, in accordancewith applicable law.

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Funding of the PlanThe plan is funded entirely through contributions to individual participants’ accountsmaintained in the Honda Manufacturing of Alabama, LLC 401(k) Savings Plan. Forthat reason, benefits under this plan are not insured by the Pension Benefit GuarantyCorporation (PBGC). The PBGC is a government agency that insures certain benefitsprovided by other types of plans.

Administrative expenses for trustee/custodian fees and audit fees are paid by the plan. Other administrative fees (including expenses such as legal, recordkeeping andconsulting fees) may be paid by the plan as HMA deems appropriate.

Plan investment fees are ongoing charges for managing the assets of each of the plan’sinvestment funds. Plan investment fees are paid to the investment fund company,investment manager or financial institution from fund assets and are incorporatedinto the computation of the fund’s price (net asset value).

Future of the PlanHMA intends to continue the 401(k) Savings Plan indefinitely. However, HMAreserves the right to amend, modify, suspend or terminate the plan at any time, forany reason.

If the plan is terminated, you will become 100% vested in and entitled to your entireaccount balance, and benefits will be distributed to you in a lump sum under the planand according to the requirements under the Employee Retirement Income SecurityAct (ERISA).

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BenefitsRetirement

Administrative Information

Nonassignment of Benefits/Qualified Domestic Relations OrderIn general, your retirement program benefits cannot be transferred or assigned to anyother person, nor is it in any way subject to your debts.

Under federal law, however, your benefits can be assigned to an alternate payee suchas a spouse, child or other dependent under a Qualified Domestic Relations Order(QDRO). The amount assigned to the alternate payee is determined or approved bythe court, and notification is given to you and the plan. Plan participants and beneficiaries may obtain, without charge, copies of the plan’s procedures governingQDROs and a sample QDRO by contacting the Human Resources Department.

Loss of BenefitsYou are responsible for providing the Human Resources Department with your current address. Your benefit under the plans may be forfeited if:• HMA tries to notify you (or your beneficiary, upon your death) that you are

eligible to receive benefit payments under the plans and• You (or your beneficiary) do not claim your benefit or make your whereabouts

known within three years after the notification.

Correcting Mistakes in PaymentsIf you or your beneficiary is mistakenly paid a benefit more than you’re entitled to,HMA may:• Require you (or your beneficiary) to return the overpayment plus earnings or• Reduce any future payment (for you or a beneficiary) by the amount of the

overpayment plus earnings.Top-Heavy Provisions

Certain government regulations require that the plans to be tested periodically to seeif certain “key” associates of HMA are earning more than 60% of the total benefitsprovided by the plan. If so, the plan is considered to be “top-heavy.”

The Pension Plan and 401(k) Savings Plan are not currently top-heavy and are notexpected to become so; however, certain special rules will apply if the plans everbecome top-heavy.

Applying for BenefitsBefore you can receive benefits, you (or your beneficiary) must request a distributionfrom the Plan Administrator. You may be asked to supply evidence of age or anyother additional information that the Plan Administrator considers necessary.

Routine requests for information regarding your benefits under the plan and othersimilar inquiries generally will not be considered benefit claims that require processingunder ERISA. If you wish to make a claim for plan benefits in accordance with yourrights under ERISA, you must make such a request in writing to the PlanAdministrator.

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Employment Rights Not Implied

Participation in the Pension Plan or 401(k) Savings Plan does not give you the right to beretained by HMA. In addition, participation does not give you the right to any benefit towhich you are not entitled under the terms of the plans.

The Plan Administrator has complete discretionary authority to make all determinationsunder the plan, including eligibility for benefits and factual determinations, and tointerpret the terms and provisions of the plan. Benefits under the plan will be paidonly if the Plan Administrator decides in its discretion that the claimant (you or yourbeneficiary) is entitled to them. The Plan Administrator’s final decision is binding.

Once you request payment, your request is processed within 90 days of receipt, andyou will receive payment as soon as administratively practicable after that time.However, in some cases additional time may be needed. If this happens, you will benotified that an additional 90-day processing period is required.

If Your Application Is DeniedIf you apply for benefits and your application is denied, in whole or in part, you (oryour beneficiary) will receive notification from the Plan Administrator within 90 days (or 180 days, if applicable). If you do not receive notice within 90 days of yourapplication (or 180 days, if applicable), you may consider your claim to be denied.

The notice will include:• The reason for denial, with reference to the specific plan provisions on which the

denial was based,• A description of any materials necessary to process the claim properly and an

explanation of why the materials are needed,• An explanation of the claims review procedure and time limits, and• An explanation of your right to bring legal action if benefits are denied following

an appeal.

Within 60 days after receiving the denial, you (or your beneficiary) or your dulyauthorized representative may submit a written request for reconsideration to the PlanAdministrator. Any request should state the reasons why you think the claim shouldbe reconsidered and should be accompanied by documents or records in support ofthe appeal. The Plan Administrator will respond within 60 days (or 120 days underspecial circumstances) after receipt of the appeal. The Plan Administrator will explainthe reasons for the decision and will refer to the specific plan provisions on which thedecision is based.

If you do not receive notice within 60 days (or 120 days, if applicable), you may consider your appeal to be denied.

The Plan Administrator’s decision on appeal is final. If you subsequently wish to file a claim against the plan, any legal action must be filed within 90 days after the PlanAdministrator’s final decision.

If your application for benefits requires a finding of your disability, special claims andappeal procedures and time limits will apply. You have a right to request a copy ofthese special procedures in writing at any time.

Your Rights Under ERISAThe Pension Plan and 401(k) Savings Plan are subject to the Employee RetirementIncome Security Act of 1974 (ERISA). As a participant in the plans, you are entitled to certain rights and protections under ERISA.

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Your HMA

BenefitsRetirement

Receive Information About Your Plan and BenefitsERISA provides that all participants are entitled to:• Examine the official plan documents or contracts free of charge. These documents

are available in the Plan Administrator’s office.• Examine a copy of the latest annual report (Form 5500 series) filed by the plan

with the U.S. Department of Labor, which is available at the Public Disclosure Room of the Employee Benefits Security Administration in Washington, D.C.

• Obtain, at a reasonable charge, a copy of the plan document, the latest Summary Plan Description and the latest annual report (Form 5500 series) by writing to the Plan Administrator.

As a participant, you also will receive a yearly summary of the plan’s financial report.The Plan Administrator must provide a copy of this report each year. In addition, youmay request a statement telling you the amount of benefit to which you are entitled.Your request must be in writing and the statement is not required to be given morethan once a year. The plan must provide this statement free of charge.

Prudent Action by Plan FiduciariesIn addition to creating rights for plan participants, ERISA imposes duties on the people responsible for operating the plan. These people are called “fiduciaries” of the plan. They have a duty to act prudently and in the interest of you and other plan participants and beneficiaries.

No one, including your employer or any other person, may discharge you or otherwise discriminate against you in any way to prevent you from obtaining a benefit to which you are otherwise entitled under the plan or from exercising yourrights under ERISA.

Enforce Your RightsIf your claim for a benefit is denied, in whole or in part, the Plan Administrator must give you a written explanation of the reason for the denial. You have the rightto obtain copies of documents relating to the decision without charge and to have the Plan Administrator review and reconsider your claim, all within certain timeschedules.

Under ERISA, there are certain steps you can take to ensure the above rights. Forinstance, if you request copies of the plan document or the latest annual report fromthe Plan Administrator and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day (adjusted for increases in the cost of living) until you receive the materials, unless the materials were not sentbecause of reasons beyond the control of the Plan Administrator.

If your claim for benefits is denied or ignored, in whole or in part, you may file suit in a state or federal court within 90 days of the date you receive notice of the benefitclaim denial or you submit your claim for benefits. In addition, you may file suit in a federal court if you disagree with the Plan Administrator’s decision or lack thereofconcerning the qualified status of a domestic relations order. If plan fiduciaries misusethe plan’s money, or if you are discriminated against for asserting your rights, youmay seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.

The court will decide who should pay court costs and legal fees. If you are successful,the court may order the person you have sued to pay these costs and fees. If you lose(for example, if the court finds your claim is frivolous), it may order you to pay thesecosts and fees.

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You may not initiate any action at law or in equity to recover under the plan untilyou have exhausted the appeal rights described above and the plan benefits requestedin that appeal have been denied in whole or in part.

Assistance with Your QuestionsIf you have any questions about the plan, you should contact the Human ResourcesDepartment or the Plan Administrator.

If you have any questions about this statement or about your rights under ERISA, or ifyou need assistance in obtaining documents from the Plan Administrator, you shouldcontact the nearest office of the Employee Benefits Security Administration, U.S.Department of Labor, listed in your telephone directory. Or you may contact theDivision of Technical Assistance and Inquiries, Employee Benefits SecurityAdministration, U.S. Department of Labor, 200 Constitution Avenue N.W.,Washington, D.C. 20210.

You may also obtain certain publications about your rights and responsibilities underERISA by calling the hotline of the Employee Benefits Security Administration.

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Your HMA

BenefitsRetirement

Plan InformationThe information below applies to the Pension Plan and the 401(k) Savings Plan sponsored by Honda Manufacturing of Alabama, LLC.

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Highlights Pension Plan 401(k) Savings Plan

Plan Effective Date

Plan ID Number

Type of Plan

Plan Sponsor andAdministrator

Employer IdentificationNumber (EIN)

Plan Trustee

Agent for Service ofLegal Process

Plan Year

January 1, 2004

201

Defined Benefit Plan

The Northern TrustCompany50 South LaSalle St.Chicago, IL 60675

All plan assets are held intrust by the trustee

HMA Retirement Plan Committeec/o Human Resources Department1800 Honda DriveLincoln, AL 35096-5000Telephone: 205-355-5000

Honda Manufacturing of Alabama, LLC 63-1240825

Honda Manufacturing of Alabama, LLCAttn.: General Counsel1800 Honda DriveLincoln, AL 35096-5000Telephone: 205-355-5000

Calendar year

March 1, 2001

003

Defined Contribution Plan

Merrill Lynch Trust1400 Merrill Lynch DrivePennington, NJ 08534

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Your HMA

BenefitsRetirement

About This Summary Plan Description

This Summary Plan Description (SPD) is intended to provide you with an explanation of the main features of the HMA Pension Plan and 401(k) SavingsPlan. It is based on the provisions described in the legal plan document (includingadministration or trust agreements). If a discrepancy exists between the plan document and this SPD or an oral interpretation, the plan document will be considered correct. HMA reserves the right to amend, modify, or terminate theplan at any time, for any reason, as described in the plan document. You mayobtain a copy of the plan document from the Human Resources Department.

June 2005

your hma retirement benefits -...

Documents