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                             Notice to Shareholders

                        Interest on Shareholders' Equity


The Board of Directors of Embraer - Empresa Brasileira de Aeronautica S.A. (the
"Company"), at a meeting held on December 12, 2003 approved:

a) the distribution of Interest on Shareholders' Equity for the Second Semester
of 2003 in the aggregate amount of R$ 118,500,493.46, in accordance with the
following conditions:

     1.   holders of common shares will be entitled to interest on shareholders'
          equity in the amount of R$ 0.15523 per share, and holders of preferred
          shares will be entitled to interest on shareholders' equity in the
          amount of R$ 0.17075 per share equal to R$ 0.6830 per American
          Depositary Shares (ADSs). This interest on shareholders' equity
          complies with the right of the holders of preferred shares to receive
          dividends 10% above the holders of common shares, according to article
          17, II, a, paragraph 1, of Law 6404//76, as amended by Law 10,303
          dated October 31, 2001;

     2.   the interest on shareholders' equity is subject to the retention of
          15% withholding tax or 25% if the beneficiary is a resident in a tax
          haven, except in the case of holders who are exempt from such tax;

     3.   this interest on shareholders' equity will be included in the
          computation of the compulsory dividends to be distributed by the
          company for the current fiscal year; the total amount shall include
          the dividends distributed by the Company for all the purposes of the
          Brazilian corporate legislation;

     4.   record date for the shares negotiated on the Sao Paulo Stock Exchange
          (Bovespa) is December 22, 2003, and record date for the ADSs
          negotiated on the New York Stock Exchange (NYSE) is December 26, 2003;

     5.   the payment of the interest on shareholders' equity in Brazil will be
          on January 15, 2004, and the holders of ADSs will be paid on January
          23, 2004, both without any compensation;

     6.   the shares will be negotiated on the Sao Paulo Stock Exchange
          (Bovespa), and New York Stock Exchange (NYSE), ex-interest right, on
          and including December 23, 2003.

b) The increase in Embraer's capital due to the exercise of employees stock
options from R$ 2,311,092,862.80 to R$ 2,320,050,682.05, consisting of a total
of 716,045,583 shares without par value, of which 242,544,448 are common shares,
including one of a special class, and 473,501,135 are preferred shares.

     As a consequence, the new wording of Art. 5 of Embraer's bylaws is as
follows:

Art. 5 - EMBRAER's subscribed and paid in share capital is two billion, three
hundred and twenty million, fifty thousand, six hundred and eighty-two Reais and
five cents (R$2,320,050,682.05) divided into seven hundred and sixteen million,
forty-five thousand, and five hundred and eighty-three (716,045,583) shares
without par value, of which two hundred and forty-two million, five hundred and
forty-four thousand, four hundred and forty-

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eight (242,544,448) are common shares, including one (1) share of a special
class, and four hundred and seventy-three million, five hundred and one
thousand, one hundred and thirty-five (473,501,135) are preferred shares.


                     Sao Jose dos Campos, December 12, 2003

                           Antonio Luiz Pizarro Manso
                    Executive Vice-President Corporate & CFO