Item 1

Annual report, Group and Parent Bank accounts for financial year 2008 Reports of the statutory auditors

1.1. Approval of annual report and Group and Parent Bank accounts

A. Motion
The Board of Directors proposes that the report on the financial year 2008 and the Group and Parent Bank accounts for 2008 be approved.

B. Explanations
The reports of the Board of Directors and the Group Executive Board on the financial year 2008 are contained in the “Financial statements”. Additional information on the strategy, organization and activities of the Group and the business divisions, as well as on risk management and control, may be found in the respective sections of the annual report, “Strategy, performance and responsibility” and “Risk and treasury management”. Information relating to corporate governance as required by the SIX Swiss Exchange Directive on Corporate Governance and the Swiss Code of Obligations can be found in the respective section of the annual report 2008 “Corporate governance and compensation.” These reports are also available on the Internet at www.ubs.com/investors. Shareholders registered in the share register in Switzerland will receive the respective reports as per their individual orders. Shareholders in the US who are registered with BNY Mellon Shareowner Services will receive a copy of the review 2008, which contains the most important information relating to UBS’s performance in 2008.

The Group income statement shows total operating income of CHF 1,201 million and total operating expenses of CHF 28,555 million, resulting in an operating loss from continuing operations before tax of CHF 27,353 million and a net loss attributable to UBS shareholders of CHF 20,887 million. Total consolidated assets decreased by CHF 259.8 billion to reach a new total of CHF 2,015.1 billion. Equity attributable to UBS shareholders totaled CHF 32.8 billion.

Parent Bank net loss was CHF 36,489 million. Total operating income of CHF 5,648 million and total operating expenses of CHF 12,528 million resulted in an operating loss of CHF 6,880 million. Depreciation, write-offs and provisions amounted to CHF 29,971 million and extraordinary income to CHF 1,002 million. Extraordinary expenses totaled CHF 482 million and taxes amounted to CHF 157 million.

In their reports to the annual general meeting, Ernst & Young Ltd., Basel, as statutory auditors, recommended without qualification that the Group and Parent Bank accounts be approved. The statutory auditors confirm that, in their opinion, the Group financial statements accurately reflect the consolidated financial position of UBS AG and the consolidated results of operations and cash flows, in conformity with the International Financial Reporting Standards (IFRS), and that they comply with Swiss law. With respect to the Parent Bank, the statutory auditors confirm that the accounting records and financial statements and the proposal of the Board of Directors relating to the proposed appropriation of results comply with Swiss law and with the Articles of Association of UBS AG.

Once all internal and external examinations are closed, the Board of Directors will ask for discharge for the financial years 2007 and 2008.

1.2. Advisory vote on principles and fundamentals of new compensation model for 2009

A. Motion
The Board of Directors proposes that the principles and fundamentals of the new compensation model for 2009 be ratified in a non-binding advisory vote.

B. Explanations
On 17 November 2008, UBS AG announced the implementation of a new compensation model for the Board of Directors and the Group Executive Board.

The new principles are set out in the compensation report 2008 which is a chapter in the annual report 2008. The compensation principles 2009 and beyond have been discussed with the Swiss Financial Market Supervisory Authority (FINMA).

The vote on the compensation principles 2009 and beyond for senior executives of UBS AG is non-binding and advisory in nature.