EX-1 3 ex1_121503.txt NOTICE TO SHAREHOLDERS [GRAPHIC OMITTED] 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- 1 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