Annual General Meeting 2001

Items

Item 2: Appropriation of retained earnings Distribution of capital to shareholders instead of a final dividend for fourth quarter 2000

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

Profit for the financial year 2000 as

per the income statement
Profit brought forward from the previous year
Release of Other reserves for partial dividend (5 October 2000)

CHF 7,906 million
CHF 7 million
CHF 1,764 million

Total available for appropriation

CHF 9,677 million

Allocation to General statutory reserve
Payment of partial dividend (1 January-30 September 2000)
Allocation to Other reserves

CHF 165 million
CHF 1,764 million
CHF 7,748 million

Total allocation

CHF 9,677 million

Instead of the payment of a final dividend for the last quarter of 2000, the Board of Directors proposes a distribution of capital to shareholders in the amount of CHF 1.60 per share in the form of a par value repayment. This will reduce the UBS share capital by approximately CHF 682 million and bring the par value per share down to CHF 8.40. Articles 4 and 4a of the Articles of Association will have to be amended accordingly. This resolution is subject to the entry into force of the amendment to the Swiss Code of Obliga-tions (Article 622 paragraph 4).

B. Explanations
At the Extraordinary General Meeting of Shareholders held on 7 September 2000, shareholders approved the payment of a partial dividend in connection with the acquisition of PaineWebber. On 5 October, a payment of CHF 4.50 per share was distributed to shareholders. This payment covered the first nine months of the year 2000. The sum of CHF 1,764 million required for this payment was taken from the Parent Company's Other reserves", since no distribution against profit is possible during the year. An appropriate amount will now be re-allocated to Other reserves".

At the Extraordinary General Meeting of Shareholders, the Board of Directors envisaged a final dividend of CHF 1.50 per share for 4Q 2000. Following a change in Swiss legal provisions, enabling par value per share to be reduced, it has now become possible to make a distribution to shareholders in the form of a reduction in the par value of each share, instead of paying a final dividend. This distribution will not be subject to a deduction of federal withholding tax (35 %), nor will it be subject to income tax for individual tax payers within Switzerland. The total profit remaining available for appropriation will be allocated to Other reserves". The Board of Directors proposes a distribution of CHF 1.60 per share. This will reduce the par value of the UBS share to an amount, which can then be split on a 3-for-1 basis pur-suant to the proposal specified in Item 8 of the Agenda.

Provided the proposed amendment to the Swiss Code of Obligations comes into force and UBS shareholders approve the Board of Directors' proposal, the distribution will be paid out on 18 July to all shareholders of record as at 13 July 2001, following the publication of the call to register claims necessary for the capital reduction.