Based in article 195-A of Law#6,404, included by #11,638, we propose the allocation in the amount of R$884,532,313.90 (eight hundred and eighty four million, five hundred and thirty two thousand, three hundred and thirteen Brazilian reais and ninety cents) for that reserve, in which is equivalent to total tax not benefited by Vale, resulting from the following incentives in the area of SUDAM: (a) R$762,774,678.73 (seven hundred and sixty two million, seven hundred and seventy four thousand, six hundred and seventy eight Brazilian reais and seventy three cents) as income tax reductions due in 2016; (b) R$48,875,990.97 (forty eight million, eight hundred and seventy five thousand, nine hundred and ninety Brazilian reais and ninety seven cents) as reinvestments in the year-base 2016; (c) R$72,881,644.20 (seventy two million, eight hundred and eighty one thousand, six hundred and forty four Brazilian reais and twenty cents) as reinvestments in the year-base 2012. Based in article 30 of law #12,973 of 2014, we also propose the allocation in the amount of R$343,037,863.83 (three hundred and forty three million, thirty seven thousand, eight hundred and sixty three Brazilian reais and eighty three cents) for that reserve, in which is equivalent to total reconstitution of tax incentive reserve used to absorb losses for the year of 2015, and refers to the following source of incentives: (a) R$124,918,106.24 (one hundred and twenty four million, nine hundred and eighteen thousand, one hundred and six Brazilian reais and twenty four cents) as income tax reductions due in the year-base 2016 SUDAM; (b) R$36,851,970.35 (thirty six million, eight hundred and fifty one thousand, nine hundred and seventy Brazilian reais and thirty five cents) as reinvestments in the year-base 2014 SUDAM; (c) R$ 174,213,784.09 (one hundred and seventy four million, two hundred and thirteen thousand, seven hundred and eighty four Brazilian reais and nine cents) as reinvestments in the year-base 2011-SUDAM; (d) R$7,054,003.15 (seven million, fifty four thousand and three Brazilian reais and fifteen cents) as part of the outstanding balance of the income tax reductions due in the year-base 2012 SUDAM. III - INVESTMENT RESERVES To this reserve must be allocated the amount necessary to ensure the maintenance and development of the Company's main activities, up to the limit of 50% of net income for the year based in article 40 and pursuant to item II, article 43 of the Company's Bylaws. Therefore, we propose to allocate to this reserve the amount of R$5,894,586,907.98 (five billion, eight hundred and ninety four million, five hundred and eighty six thousand, nine hundred and seven Brazilian reais and ninety-eight cents). IV - REMUNERATION TO SHAREHOLDERS EQUITY Pursuant to Article 42 of Vales Bylaws, after establishing the legal and tax incentive reserves, the proposed allocation of the remaining amount of the net income at the end of each fiscal year shall be submitted to the Annual Shareholders Meeting by the Board of Directors, considering that the amount of interest paid or accrued as interest on shareholders equity, according to Article 9, Paragraph 7 of Law #9,249, and the applicable laws and regulations, may be attributed to the mandatory dividend and the minimum annual dividend for preferred shares, which shall integrate the amount of dividends distributed by the company for all legal effects. Pursuant to Article 44 of the Bylaws, at least 25% of the net income of the year, adjusted under the legislation shall be allocated to payment of dividends. The adjusted net income of the year of 2016 was R$11,761,350,206.85 (eleven billion, seven hundred and sixty one million, three hundred and fifty thousand, two hundred and six Brazilian reais and eighty five cents), in which corresponds to the net income of the year of R$13.311.455.285,00 (thirteen billion, three hundred and eleven million, four hundred and fifty five thousand, two hundred and eighty five Brazilian reais), reduced by the amount of the constituted legal reserve of R$665,572,764.25 (six hundred and sixty five million, five hundred and seventy two thousand, seven hundred and sixty four Brazilian reais and twenty five cents), and the allocation to the tax incentive reserve of R$884,532,313.90 (eight hundred and eighty four million, five hundred and thirty two thousand, three hundred and thirteen Brazilian reais and ninety cents). Therefore, the minimum mandatory remuneration of 25% of the adjusted net income as dividends amounts to R$3,459,223,253,25 (three