Annual General Meeting 2002

Item 2: Appropriation of retained earnings, Distribution of capital to shareholders instead of a dividend for 2001

A. Proposal
The Board of Directors proposes that the Parent Company profit be appropriated as follows:

The Board of Directors proposes a distribution of capital to shareholders in the amount of CHF 2 per share in the form of a par value repayment, instead of the payment of a dividend for 2001. This will reduce the UBS share capital by approximately CHF 2.5 billion and bring the par value per share down to CHF 0.80. Articles 4 and 4a will have to be amended accordingly (see item 6).

B. Explanations
As for the last quarter of financial year 2000, the Board of Directors proposes to make a distribution to shareholders in the form of a repayment on the par value of each share, instead of paying a dividend for financial year 2001. Such distribution is not subject to a deduction of federal withholding tax (35%) nor is it subject to income tax for individual taxpayers within Switzerland.

The Board of Directors proposes a distribution of CHF 2 per share, which is almost the same amount as last year (CHF 6.10 pre split, CHF 2.03 at today’s par value). The total parent com-pany profit will be allocated to „Other reserves”, which is part of Shareholders’ equity.

The distribution will be paid out on 10 July to all shareholders of record as at 5 July 2002, following the publication of the call to register claims, necessary according to Swiss Company Law for capital reductions. Ernst & Young Ltd. as Statutory Auditors have confirmed in a special audit report on behalf of the AGM that as of 31 December 2001 the claims of creditors were fully covered even after the planned reduction in capital and that the Bank has adequate liquidity.