Financial Businesses Results

The fair value of shares granted in first quarter 2007 was CHF 1,855 million, up 22% from CHF 1,517 million granted in first quarter 2006. This was mainly driven by higher bonuses as well as an increased proportion of bonuses delivered in restricted shares. The fair value of options granted in first quarter 2007 was CHF 405 million, down from CHF 483 million in the same quarter a year ago. The decrease reflects a 6% drop in the number of options granted and a lower fair value per option, reflecting changes in market parameters.

Most share-based compensation is granted in the first quarter of the year, with any further grants generally reflecting those made under the Equity Plus program, an ongoing employee participation program under which voluntary investments in UBS shares each quarter are matched with option awards. These amounts, net of estimated forfeited awards, will be recognized as compensation expense over the service period, which is generally equal to the vesting period. Most UBS share and option awards vest incrementally over a three-year period.