WEG S.A. CNPJ: 84.429.695/0001-11 A PUBLICLY LISTED COMPANY NOTICE TO THE SHAREHOLDERS REDUCTION OF COMPANY SHARE CAPITAL WEG S.A. (WEG), informs its shareholders, as additional information of disclosure of material fact published on 03/16/2006 and announcement to the market published on 03/29/2006, that : • WEG´s shareholders approved, in Extraordinary Shareholders Meeting (Assembléia Geral Extraordinária or AGE), held on April 20, 2006, the reduction of its share capital in R$ 93,000,000.00 (ninety three million reais), from R$ 1,000,000,000.00 (one billion reais) to R$ 907,000,000.00 (nine hundred and seven million reais), without reduction in the total number of shares in which its capital is divided. • The legal period for WEG creditors to oppose the capital reduction shall end in June 23, 2006. • Once this legal period has ended, the capital reduction will be concluded, as described below, with the delivery of shares of Perdigão S.A. (Perdigão) held by WEG to its shareholders in proportion to their participation in the capital of WEG. 1) CHARACTERISTICS • The ownership of Perdigão shares will be transferred to the persons that are shareholders of record of WEG on June 23, 2006, in the proportion of 0.0161245 ordinary share of Perdigão for each share of WEG of any type. • No shareholder of WEG will receive, as a result of the distribution, less than one share of Perdigão. The fractions of shares that may result from the restitution ratio will be rounded up to the nearest integer. • WEG´s shares will start to be traded “ex-rights to payment of capital reduction in Perdigão shares” on June 26,2006. • The shares of Perdigão received will maintain all inherent rights, including the rights to receive dividends and interest on capital that should be declared and / or paid by Perdigão from the date of the AGE that will deliberate over the matter. 2) DELIVERY OF THE SHARES • The shares of Perdigão will be credited for WEG´s shareholders on June 29, 2006. • For those shareholders that have their shares under custody of Banco Bradesco S.A. as a financial depository, with their personal and fiscal information regularized, the transfer of the shares of Perdigão will be done electronically and automatically, under the custody of Banco Itaú S.A. as the financial depository. • For those shareholders that have their shares under custody of CBLC – Companhia Brasileira de Liquidação e Custódia, the shares will be delivered to CBLC which will then transfer them to the shareholders through their depository brokers. This is a convenience translation of the Notice to the Shareholders (“Aviso aos Acionistas”) originally published in Portuguese in this date. WEG S.A. CNPJ: 84.429.695/0001-11 A PUBLICLY LISTED COMPANY 3) SUPPLEMENTARY INFORMATION More detailed information about the reduction of company share capital may be achieved from: • Depository Financial Institution Bradesco – Shares and Custody Department Tel. (0-XX-11) 3684-9495; • Depositary Financial Institution Itaú – Shares and Custody Department Tel. (0-XX-11) 5029-1908 • WEG S.A. Avenida Prefeito Waldemar Grubba, 3300 89256-900 - Jaraguá do Sul – S.C. Tel. (0-XX-47) 3372-6973 • Perdigão S.A. Avenida Escola Politécnica, 760 05350-901 – São Paulo – S.P. Tel. (0-XX-11) 3718-5301/5306/5465 Copies of the public documents relation to the share capital reduction, such as Shareholders Meetings records and announcements to the markets, can be obtained on the CVM (www.cvm,gov.br) and Bovespa (www.bovespa.com.br) websites, or in WEG’s Investor Relations website (www.weg.net). JARAGUÁ DO SUL (SC), JUNE 21st, 2006 WEG S.A. This is a convenience translation of the Notice to the Shareholders (“Aviso aos Acionistas”) originally published in Portuguese in this date.