[EMBRAER LOGO][GRAPHIC OMITTED]


                          ANNOUNCEMENT TO SHAREHOLDERS


Sao Jose dos Campos, Sao Paulo, Brazil, June 09, 2003. In accordance with
Embraer - Empresa Brasileira de Aeronautica S.A.'s stock option plan for its
management and employees, including those of its subsidiaries, which was
approved at Embraer's special shareholders' meeting held on April 17, 1998,
Embraer hereby informs its shareholders that based on item 7.1(a) of the stock
option plan, holders of stock options representing 360,000 preferred shares of
Embraer decided to exercise such options on June 09, 2003. As a result,
Embraer's capital was increased by R$ 450,960.00 being paid-in in cash.

Embraer's capital was therefore increased from R$ 2,308,518,515.42 to R$
2,308,969,475.42, consisting of a total of 713,334,355 shares without par value,
of which 242,544,448 are common shares, including one of a special class, and
470,789,907 are preferred shares.

This capital increase will be ratified in the next meeting of Embraer's Board of
Directors and the amendment to article 5 of Embraer's bylaws will be approved in
the next special shareholders' meeting.

The preferred shares issued as a result of the exercise of the stock options
will, as of June 09, 2003, have the same characteristics and conditions as the
outstanding preferred shares and will also be entitled to the integral rights
and advantages established in Embraer's bylaws for its preferred shares.



Antonio Luiz Pizarro Manso
Executive Vice-President
   Corporate & CFO